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Top 5 Factors Used to Determine Salary Structure in the Job Market

Salaries are the things for which an employee does a nine to five job. He spends most of his time at work rather with his family and friends. There is mostly one holiday in a week and around 12 to 15 leaves per annum. Thus, while determining the salary you need to be realistic as well as genuine regarding the problems, concerns, expectations, and requirement of your employee. Remember that salary is the most basic thing that plays a vital role in the satisfaction and performance of your employee at work. Thus, while determining salary here are the factors that need to be involved:

Employee Skills and Experience:

First of all, you will have to see that either the employee is having an experience and skills against the job or he is a fresh candidate. There will be drastic difference in the work style of an experienced and inexperienced candidate. Thus, you cannot offer salary to both the candidates as same. Rather, keep in mind the skill structure of your employee while deciding for his/her salary. Higher education is important to get your dream job.

Supply and Demand:

Moreover, if you talk from the point of view of an employer, he wants to higher staff in the least salary. Thus, when you find that there are numerous candidates applied against once vacancy, and supply of the employee is exceeding demand, here you can prefer an employee on even lower salaries. However, while offering him basic wages, don’t forget to keep his skill set in your mind.

Search The Market Well:

One more factor that will help you in determining genuine wage rate is searching the market well before reaching any decisive amount. For example, if you are hiring an employee and offer him salary less than market wage rate, the employee will leave your job whenever he will get a call from another company. On the other hand, if you will offer a salary that exceeds market wage rate, the rest of the market employee rate will be disturbed.

Considering Employee Necessities in Mind:

As stated above, a satisfied employee is someone who has enough salary to meet his / her necessities thus if you find an employee worried about the expenses and he/she is skillful and lucrative as well, it is allowed that you offer him a good wage rate even when you have to go over the board. In this way, the employee loyalty with you will increase and he will work more passionately with you.

Facilities Other Than Basic Salary:

If you are giving enough facilities like free medical, insurance, and education fee for the children of your employees, then a huge requirement for your employee is getting fulfilled already. Thus, less basic salary can compensate here with his/her requirements. Employees usually don’t leave jobs that come with facilities that are other than salary.

When you will keep the above mentioned factors in mind, you will not only be able to determine a good salary for your employee but these factors also promise employee satisfaction and loyalty.