Neumann Executive’s Post

Salaries – Cost or Investment? Regardless of economic conditions, compensation systems remain a key factor in driving organizational efficiency. In recent years, employers have faced increasing challenges: labor market instability, rising minimum wages, and growing employment costs. 𝐇𝐨𝐰 𝐜𝐚𝐧 𝐜𝐨𝐦𝐩𝐚𝐧𝐢𝐞𝐬 𝐚𝐩𝐩𝐫𝐨𝐚𝐜𝐡 𝐜𝐨𝐦𝐩𝐞𝐧𝐬𝐚𝐭𝐢𝐨𝐧 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜𝐚𝐥𝐥𝐲 𝐫𝐚𝐭𝐡𝐞𝐫 𝐭𝐡𝐚𝐧 𝐣𝐮𝐬𝐭 𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐨𝐧𝐚𝐥𝐥𝐲 𝐢𝐧 𝐭𝐡𝐞 𝐟𝐚𝐜𝐞 𝐨𝐟 𝐭𝐡𝐞𝐬𝐞 (𝐚𝐧𝐝 𝐟𝐮𝐭𝐮𝐫𝐞) 𝐜𝐡𝐚𝐥𝐥𝐞𝐧𝐠𝐞𝐬? STEP ONE: JOB STRUCTURE Does a Senior Specialist truly have greater decision-making power and a broader skill set? Many companies are currently grappling with this very question. A well-defined role hierarchy is the foundation of an effective compensation strategy. 𝐂𝐥𝐞𝐚𝐫 𝐣𝐨𝐛 𝐝𝐞𝐬𝐜𝐫𝐢𝐩𝐭𝐢𝐨𝐧𝐬 𝐚𝐧𝐝 𝐫𝐞𝐬𝐩𝐨𝐧𝐬𝐢𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬 𝐡𝐞𝐥𝐩 𝐩𝐫𝐞𝐯𝐞𝐧𝐭 𝐜𝐨𝐧𝐟𝐮𝐬𝐢𝐨𝐧 𝐚𝐧𝐝 𝐢𝐧𝐞𝐟𝐟𝐢𝐜𝐢𝐞𝐧𝐜𝐢𝐞𝐬. Moreover, 𝐧𝐨𝐭 𝐞𝐯𝐞𝐫𝐲 𝐨𝐫𝐠𝐚𝐧𝐢𝐳𝐚𝐭𝐢𝐨𝐧 𝐡𝐚𝐬 𝐚 𝐬𝐭𝐫𝐮𝐜𝐭𝐮𝐫𝐞𝐝 𝐣𝐨𝐛 𝐦𝐨𝐝𝐞𝐥 – 𝐭𝐡𝐚𝐭 𝐢𝐬, 𝐚 𝐝𝐞𝐟𝐢𝐧𝐞𝐝 𝐚𝐩𝐩𝐫𝐨𝐚𝐜𝐡 𝐭𝐨 𝐝𝐞𝐬𝐢𝐠𝐧𝐢𝐧𝐠 𝐫𝐨𝐥𝐞𝐬. Should positions be highly specialized or broader, encompassing a wider range of responsibilities? This choice impacts salary structures, bonus policies, and career progression paths. Each of these elements contributes to what we call 𝗢𝗥𝗚𝗔𝗡𝗜𝗭𝗔𝗧𝗜𝗢𝗡𝗔𝗟 𝗖𝗟𝗔𝗥𝗜𝗧𝗬 – a level of transparency that today’s employees expect and that should be standard in any company. Anna Jabłońska-Trepka, Partner at Executive Advisory, highlights: 𝑇ℎ𝑒 𝑓𝑢𝑡𝑢𝑟𝑒 𝑜𝑓 𝑤𝑜𝑟𝑘 𝑤𝑖𝑙𝑙 𝑏𝑒 𝑠ℎ𝑎𝑝𝑒𝑑 𝑏𝑦 𝑑𝑦𝑛𝑎𝑚𝑖𝑐 𝑓𝑎𝑐𝑡𝑜𝑟𝑠 𝑠𝑢𝑐ℎ 𝑎𝑠 𝑡𝑒𝑐ℎ𝑛𝑜𝑙𝑜𝑔𝑖𝑐𝑎𝑙 𝑎𝑑𝑣𝑎𝑛𝑐𝑒𝑚𝑒𝑛𝑡𝑠, 𝑑𝑒𝑚𝑜𝑔𝑟𝑎𝑝ℎ𝑖𝑐 𝑠ℎ𝑖𝑓𝑡𝑠, 𝑎𝑛𝑑 𝑒𝑣𝑜𝑙𝑣𝑖𝑛𝑔 𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑒 𝑝𝑟𝑒𝑓𝑒𝑟𝑒𝑛𝑐𝑒𝑠. 𝐴𝑠 𝑎 𝑟𝑒𝑠𝑢𝑙𝑡, 𝑐𝑜𝑚𝑝𝑒𝑛𝑠𝑎𝑡𝑖𝑜𝑛 𝑠𝑦𝑠𝑡𝑒𝑚𝑠 𝑤𝑖𝑙𝑙 𝑏𝑒𝑐𝑜𝑚𝑒 𝑚𝑜𝑟𝑒 𝑓𝑙𝑒𝑥𝑖𝑏𝑙𝑒, 𝑝𝑒𝑟𝑠𝑜𝑛𝑎𝑙𝑖𝑧𝑒𝑑, 𝑎𝑛𝑑 𝑝𝑒𝑟𝑓𝑜𝑟𝑚𝑎𝑛𝑐𝑒-𝑑𝑟𝑖𝑣𝑒𝑛. Employees today expect transparency – not just in salaries but also in career progression. Organizations with a high degree of clarity foster greater motivation, loyalty, and meaningful skill development. Sylwia Fronc, 𝐏𝐚𝐫𝐭𝐧𝐞𝐫 𝐚𝐧𝐝 𝐇𝐞𝐚𝐝 𝐨𝐟 𝐇𝐑 𝐀𝐝𝐯𝐢𝐬𝐨𝐫𝐲 at Neumann Executive adds: 𝐴 𝑤𝑒𝑙𝑙-𝑑𝑒𝑠𝑖𝑔𝑛𝑒𝑑 𝑎𝑛𝑑 𝑒𝑓𝑓𝑒𝑐𝑡𝑖𝑣𝑒𝑙𝑦 𝑖𝑚𝑝𝑙𝑒𝑚𝑒𝑛𝑡𝑒𝑑 𝑐𝑜𝑚𝑝𝑒𝑛𝑠𝑎𝑡𝑖𝑜𝑛 𝑝𝑜𝑙𝑖𝑐𝑦 𝑐𝑎𝑛 𝑏𝑒 𝑎 𝑐𝑟𝑢𝑐𝑖𝑎𝑙 𝑠𝑜𝑢𝑟𝑐𝑒 𝑜𝑓 𝑐𝑜𝑚𝑝𝑒𝑡𝑖𝑡𝑖𝑣𝑒 𝑎𝑑𝑣𝑎𝑛𝑡𝑎𝑔𝑒. 𝐼𝑡 𝑠ℎ𝑜𝑢𝑙𝑑 𝑏𝑒 𝑖𝑛𝑡𝑒𝑛𝑡𝑖𝑜𝑛𝑎𝑙, 𝑏𝑢𝑠𝑖𝑛𝑒𝑠𝑠-𝑑𝑟𝑖𝑣𝑒𝑛, 𝑎𝑛𝑑 𝑎𝑙𝑖𝑔𝑛𝑒𝑑 𝑤𝑖𝑡ℎ 𝑚𝑎𝑟𝑘𝑒𝑡 𝑟𝑒𝑎𝑙𝑖𝑡𝑖𝑒𝑠. Is compensation in your organization part of a cohesive strategy, or rather the result of ad-hoc decisions? What are your experiences in this area? Share your thoughts in the comments below!