Designing Fair Compensation

Pay Systems

A fair compensation system enhances competitiveness, makes companies appealing to applicants, and fosters the long-term retention of qualified and motivated employees.

How an compensation system should be designed in order for companies to remain competitive, attractive to applicants, and able to sustainably retain employees? When developing compensation systems, it is crucial to have a fair and transparent collaboration between employers and employee representatives. Employees should be able to understand how their compensation is composed and which criteria play a role in it. Companies are well advised to align economic aspects and work structures with appropriate salary packages. This way, they establish the necessary foundations for long-term employee retention and also stand out in the job market for potential candidates.

Position structure and job profiles in focus

The basis for this includes, for example, a clearly defined position structure with documented job profiles, as well as an analysis of current and target salary bands that establish the compensation range for activities considered equivalent at a particular level of significance. The incorporation of additional benefits such as company pension plans, further education opportunities, or flexible work time models can contribute to binding employees to the company in the long term.

When designing a compensation system, legal framework conditions must also be taken into account. These include not only the applicable minimum wage but also collective bargaining provisions.

Our experts are at your service to assist in creating a compensation system tailored to your company’s needs, in harmony with the works council. This will establish a clear, easy-to-handle compensation system that operates on transparent rules and is based on the comparability of job significance.

Contact us and let's work together to develop a customized concept that aligns with your needs and goals.