The last time remuneration structures had been conceptually defined in a stock market-oriented wholesale company was in the 1990s. Over the years and due to many changes in management, the structure was no longer strictly adhered to. This was particularly true above the collectively agreed structures. As a result, there was a lack of reliable guidance for annual salary reviews, new appointments and transfers. As a result, a certain arbitrariness and lack of transparency had spread. This also affected fringe benefits such as company cars. The opinion of managers and their proximity to the board were often more decisive than the previously introduced remuneration structures.
Remuneration structure should strengthen the company's market attractiveness
As HR Director, the current interim manager was tasked with developing the internal evaluation of the functions and the market view. From this, he was to develop a new remuneration structure that would provide internal orientation. Externally, the remuneration structure should also ensure or strengthen the market attractiveness of the company. The client had made it a condition that the company's managers be involved in the process.
First, the HR expert assessed the market situation and internal evaluation. He developed the market situation in cooperation with a management consultancy.
Internal evaluation coordinated with all stakeholders
For the internal evaluation, he set up a transparent process with all stakeholders. The challenge was to have open discussions with all affected managers and to gather opinions without adopting them without reflection. Furthermore, emerging conflicts and resistance had to be used productively or resolved. Another challenge was that in some cases the internal value of a function could not be substantiated with market data. This was due to the fact that these functions were very company-specific. It was necessary to work with analogies in order to arrive at a mutually agreeable assessment.
Score system takes all aspects of the job descriptions into account
The results of the internal assessment were finally matched with the market situation. The manager graded the job evaluations using a points system that took all aspects of the job descriptions into account. This involved, for example, the direct influence of the function on turnover and profit or the management margin of the function. The scores for each criterion were used to determine an overall score, which was then ranked. The functions could then be combined into groups, which in turn were assigned to remuneration bands. These were based on the market values determined.
New remuneration structure with assigned bands and fringe benefits
The end result was a new remuneration structure with bands and fringe benefits assigned to the functions, which is used for annual reviews and new hires or transfers. The current interim manager had thus successfully ensured that a transparent remuneration structure provides long-term orientation.
