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It does not matter whether you have decided to call your people human resources or still use "personnel." The former is more appropriate for use in human resource management.

Your organization, as one of the responsible employers, would have put in place a system under which you have carefully considered all factors and aspects of the salaries and benefits you give your people.

A good salary and employee benefits package has the main aim of attracting the right people to work for you as well as motivating employees to perform better and to remain with your organization. One of the strategies you can adopt is to provide your people enough income to pay for all the necessities of life and a bit more besides.

How do you ensure that the quantum and the range of the salary you pay is is competitive and can motivate employees at every level?

You need to do the following:

1. Help your organization to formulate a salary and benefits policy for approval by the board of directors
2. Collect all important information on your present rewards system.
3. Conduct a Market Survey to find out the salary range for each equivalent position found in organizations having similarities to your organization. The pay statistics are usually presented in such a way that allows you to determine the average pay or wage.
4. Design a Pay System or a Pay Scale for each group of employees using the data that you have gathered.
5. Ensure that every important matter in the salary and benefits program is not missed. For example, how will you determine the starting pay of a new employee? How much pay increase will you give when a worker is promoted? How much does this differ in the case of managers and executives?
6. See to it that you make necessary changes to your reward system in response to changes within and outside your organization.
7. Review your system from time to time for effectiveness

Annual Pay Increase
One of the tasks you are expected to carry out each year is to make proposal on the quantum of annual pay increase. The amount of increase is based on many factors. One of these is how well employees have done their jobs. You can get this information from performance evaluation reports after the evaluation is done at the end of the year.

An increase is a reward for a work done well.

Since the increase is based on performance it is important that the performance appraisal is conducted properly.

After considering everything you may decide that you are not going to give any increase for a particular year. You may want to do this even if employees' performance is encouraging. Usually the reason for making this kind of decision is you cannot afford it.

This decision has far-reaching effects. Clearly explain to everyone why this decision is taken.

Understanding of the Term
Some people use the words "salary (salaries)", "wages" and remuneration interchangeably. Many agree that salary is a fixed wage received on a regular basis, say per week or per month. By this, you can determine the fixed income of an employee.

But keep in mind that "wage" is more suitable for use if the job is paid on an hourly or daily basis or by a piece of a job.

Some other people use "compensation," that is something given to compensate a person for doing something.

Benefits and Bonuses
Employee benefits are incentives that are non-cash in nature. An example is medical and health benefits.

Bonuses that you pay to employees are an additional compensation over and above the fixed pay. When you pay bonus, you are giving your employees a share in the profits made by your organization for the past year. This is not based on individual performance of employees, whether managers or staff.

This means that if, as an employer, you do not have enough cash, no bonus is paid. Based on this, it is not advisable to agree to a contractual bonus.

This is a remuneration that you can put at risk.

Good Pay Package
It is not enough that your pay package helps you to enhance the image of your organization as "an employer of choice." You need to ensure that the package can motivate employees to work well and to continue working for the organization.

It is always better to have a pay plan. At least you will know whether it needs modifications after reviewing its impacts and by taking relevant market factors into consideration.

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