This salary policy template has 6 pages and is a MS Word file type listed under our business plan kit documents.
Sample of our salary policy template:
SALARY POLICY GENERAL [COMPANY NAME] strives to develop and implement its Salary Policy as a fair, consistent, competitive program of financial compensation for all employees of the Company to be balanced with the responsibilities that have been undertaken. The purpose of the Salary Policy is to: Establish guidelines for managing [COMPANY NAME] pay practices; Maintain fair and competitive salary ranges consistent with the Company's economic requirements; Attract and retain qualified employees by maintaining a salary structure that is competitive with the external job market; Promote internal equity and consistency across diverse cooperative functions; and Provide the foundation for a performance-based pay system. The Board of Directors, therefore, adopts this Salary Policy. SCOPE This Policy includes all managers and employees at all levels within [COMPANY NAME] and its affiliated companies. PRINCIPLES OF SALARY POLICY This Salary Policy is based on the following principles that guide the compensation programs and the consequent actions: Fairness and consistency with the responsibilities assigned and the capabilities demonstrated; Alignment with the Company strategies and with the defined objectives; Competitiveness with regard to practices and market trends; Enhancement of merit and performance, in terms of results, behaviors and values acted; Clear governance and compliance with the regulatory framework. THE POLICY The salaries that are to be paid to managers and employees at all levels of the Company shall be compatible with internal balances, strategic targets and market conditions. A general increase in salaries is to be implemented once a year. A two-stage process is followed in the determination of the rate of yearly wage increase: first, the general corporate wage increase rate shall be determined, and then personal wage increase rates shall be specified. Determination of wages in duty changes and recruitments and yearly general wage increases are arranged through salary management procedures and announced to all employees. THE EMPLOYEE'S SALARY STRUCTURE The Company's main policy is to offer competitive salary packages to its employees. Market research is conducted to enable the practices to be parallel in quality and value with the general conditions present in the market. The Salary Policy and related practices are determined regarding common interests of partners, employees and customers. [COMPANY NAME]'s Salary Policy consists of a base salary as well as performance-based and cash bonuses. The Salary Policy is designed to attract, retain and motivate staff and is consistent with the objectives outlined in the business strategy through: an appropriate balance between variable and fixed components; a proper connection with the salary of individual performers and the Company. It is considered "compensation" when any form of payment or benefit is paid by the manager to his staff, directly or indirectly, in cash, in financial instruments or in kind (fringe benefits), in return for performance work or professional services rendered. The salary of the "Identified Staff," with different salary packages and pay-mix because of the role, is based on the following components: Fixed component; Variable component of short term and long term; Benefits. FIXED COMPONENT The fixed component of salary is defined according to the role and is consistent with the delegated responsibilities. It also considers the experience of the individual and the skills required, other than the quality of the contribution made in relation to the achievement of the business objectives of the Company. VARIABLE COMPONENT The variable component aims to target the resources' performance to business objectives: through incentives directly linked to the Company and individual goals; in both quantitative and qualitative terms. The performance is evaluated over a multi-year period and following a multi-dimensional approach that considers, depending on the performance period: results achieved by individuals; results achieved by the units in which they work; results achieved by the Company overall. The staff incentive systems should be inspired by fairness in relationships, containment of legal and reputational risks, compliance with applicable laws and regulations, and self-discipline. A maximum limit to the variable component payable is set and the objectives are defined, measurable, and strictly connected to the achievement of economic, financial and operational results. BENEFITS Benefits represent a substantial component of the salary package - in a total compensation perspective - in addition to monetary payment. They include: Supplementary pension treatment; Health care; Long-term care. MANAGERS' SALARY STRUCTURE The salary of managers consists of the following four components: a fixed (base) salary component; a variable component (annual performance-based bonus or short-term incentive); a long-term component (performance-based long-term incentive, stock options and performance shares); and pension provisions and fringe benefits. The level of the above components for managers is compared with a balanced salary peer group of companies selected based on industry, size and geographical spread. FIXED COMPONENT A manager's salary consists of a fixed component, consistent with the role and sufficient to pay the delegated responsibilities and to ensure the autonomy and independence required for this function. The monetary variable component is linked to the level of performance objectives achievement and to benefits consistent with the industry and Company regulations.
