How To Reduce Wages

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How To Reduce Wages
How To Reduce Wages

Video: How To Reduce Wages

Video: How To Reduce Wages
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When using certain economic models in company management, management is interested in reducing fixed costs. The wage fund, no doubt, constitutes a significant part of them. But there is a way to reduce it - to introduce a mandatory bonus system of incentives for employees.

How to reduce wages
How to reduce wages

It is necessary

  • -Wage fund;
  • -Provision on the bonus payment system;
  • -Budget.

Instructions

Step 1

Cut half of each employee's salary while introducing bonuses. This measure can make you unpopular because most of us are sensitive to the guaranteed part of the payments. We initially perceive interest as something ephemeral, which "may or may not be." Even people with economic education, who understand what caused such a measure as a reduction in the guaranteed part of wages, experience discomfort and the feeling that they want to be cheated. However, having received bonus payments for the first time, which in some cases turn out to be more than the amount that has been cut, they change their mind.

Step 2

Enter your seniority bonus. Let's say every employee who has worked for more than a year receives an additional certain percentage of the guaranteed salary. A gradation of terms is necessary: for example, payments for one year will be one amount, for 3 years - another, for work more than 5 years - a third. What kind of interest to pay to employees is decided individually in each specific company. The main thing is that these payments, as well as all other bonuses, should be "transparent", i.e. all employees knew how much they should get their hands on.

Step 3

Develop a sales bonus when it comes to a sales company whose main employees are involved in the sale of any product. This bonus, which justifies the reduction in salary, can be of three types: for exceeding the number of transactions (if the manager or agent sold more than planned); for the largest amount of a one-time transaction; for the sale of a certain group of goods. As for the personnel employed in production, unfortunately, this bonus scheme cannot be implemented for them. In this case, it is recommended to introduce the so-called "personal" bonus. It is paid either from exceeding the plan, or with a significantly higher quality of products.

Step 4

Introduce piece-rate payment systems. This is also one of the ways to legally reduce wages, or even tie wages to output. Piecework has its own types: direct piecework, indirect piecework, bonus piecework and progressive piecework. Which one suits your business depends on the business processes taking place in your enterprise.

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