By Shuki Stauber
The following two examples serve to illustrate the discussion above:
Fair wages, above the average for the industry in question, are a central part of a large international communications company that has been operating for decades in Israel and employs thousands of workers. This type of wage level allows it to recruit very good employees, which is considered a highy important factor, and at the same time allows it to continue receiving development assignments from the parent company. The company’s primary enterprise in Israel, development, competes with the company’s other development setups in different parts of the world. Therefore it has been asked to keep wage levels down to a reasonable level, otherwise the price of labor will shoot up and it will no longer be worthwhile for the parent company to send development projects their way.
Every position at the company has a salary scale. Within that range the salary is based on the worker’s attributes. For example, in engineering experience carries substantial weight. The salary is also dependent on the employee’s performance.
Likewise at a medium-size manufacturing company the compensation policy calls for wages about the average in its industry – steel. But when it comes to professions in large demand, such as engineers, to bring in talented employees it has to compete with the entire job market – including leading high-tech companies – so the aim is to ensure wages are at least like the average amount for that profession commonly offered in the job market.
Although the base salaries for production workers at this company are typically just slightly above minimum wage, only rarely is this their actual take-home pay for three main reasons: professional skill and experience entitle the worker to higher pay, overtime hours are routine and once a month production workers receive bonuses for personal and team achievements.
Fair wages, above the average for the industry in question, are a central part of a large international communications company that has been operating for decades in Israel and employs thousands of workers. This type of wage level allows it to recruit very good employees, which is considered a highy important factor, and at the same time allows it to continue receiving development assignments from the parent company. The company’s primary enterprise in Israel, development, competes with the company’s other development setups in different parts of the world. Therefore it has been asked to keep wage levels down to a reasonable level, otherwise the price of labor will shoot up and it will no longer be worthwhile for the parent company to send development projects their way.
Every position at the company has a salary scale. Within that range the salary is based on the worker’s attributes. For example, in engineering experience carries substantial weight. The salary is also dependent on the employee’s performance.
Likewise at a medium-size manufacturing company the compensation policy calls for wages about the average in its industry – steel. But when it comes to professions in large demand, such as engineers, to bring in talented employees it has to compete with the entire job market – including leading high-tech companies – so the aim is to ensure wages are at least like the average amount for that profession commonly offered in the job market.
Although the base salaries for production workers at this company are typically just slightly above minimum wage, only rarely is this their actual take-home pay for three main reasons: professional skill and experience entitle the worker to higher pay, overtime hours are routine and once a month production workers receive bonuses for personal and team achievements.
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An important component in the organization’s compensation policy is the way raises are given. At high-tech and other large companies it’s customary to discuss employees’ performance and their base pay at the end of every year and compensate them accordingly. At one large high-tech company, for example, the worker’s salary level is evaluated according to his performance, position, the state of the market and the state of the company. Compensation can be in the form of a one-time bonus, but generally it is granted in the form of a pay raise or a promotion to a higher rank in the pay scale. The criteria for receiving a raise vary from one company to the next.
On the other hand, the annual salary talks at the international communications company mentioned above do not always conclude with a pay raise. The talks are used to assess the employee’s salary level and to compare it to similar professionals in the market. This means even if his performance was satisfactory, but his current pay is above typical rates in the job market (e.g. if the year before he received a handsome pay raise) he won’t necessarily receive another raise. In most cases the worker is not disappointed even if it may be natural for him to expect a raise, because increasing the salary level is only one component in his monetary compensation. At other companies there are no scheduled salary talks, but at these companies, like at the manufacturing company mentioned above, salary is tied to the managers’ satisfaction with how a given worker carries out his job. If a manager wants to give a raise to the key workers in his unit, he will ask the executive board for permission.
On the other hand, the annual salary talks at the international communications company mentioned above do not always conclude with a pay raise. The talks are used to assess the employee’s salary level and to compare it to similar professionals in the market. This means even if his performance was satisfactory, but his current pay is above typical rates in the job market (e.g. if the year before he received a handsome pay raise) he won’t necessarily receive another raise. In most cases the worker is not disappointed even if it may be natural for him to expect a raise, because increasing the salary level is only one component in his monetary compensation. At other companies there are no scheduled salary talks, but at these companies, like at the manufacturing company mentioned above, salary is tied to the managers’ satisfaction with how a given worker carries out his job. If a manager wants to give a raise to the key workers in his unit, he will ask the executive board for permission.
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