Development and implementation of a point-based labor remuneration system in small business

The paper deals with the evaluation of the remuneration system implemented by a small business company. The authors develop a new remuneration system and analyze its implementation as well as employees' satisfaction with the new system of stimulation. It is a tariff less one, where the basic part of the salary is calculated in accordance with the number of points, assigned to a position, and the bonus part of the salary is calculated, taking into consideration the percentage of accomplishment of the general plan, in form of shares from the bonus fund. Using the developed tables and criteria, every position is assessed to calculate the base part of salaries. Assessment factors are chosen taking into account requirements for particular positions and the relevant functions, as well as hazards and difficulties that may arise at the execution of work. Assigning points to employees is based on observation of the staff for a one-month period, on a survey of employees, and taking into account the opinion of the top management. Every point has been established on the basis of consensus, which suits all sides: the top management and employees of the company. The new remuneration system was introduced on the 12 of December, 2014 and is exploited at present by "Alternative", LLC. The company is specializes in water-pipe laying, using technology of pipe laying by open pit method and by trenchless ones. The company is located both in St. Petersburg and Leningrad Oblast; the head office is situated in St. Petersburg. The survey was conducted among employees of the company to assess the new remuneration system. Two surveys were conducted using special questionnaire: before and after implementation of the new remuneration system. The obtained results show that employee loyalty and satisfaction increased by 25 % after the implementation of the new remuneration system, which can partly be caused by a "Hawthorne effect". Changes in the remuneration system led to greater employee satisfaction and their assessment of their activity.

Keywords

Authors

References