What is the nature of performance based pay?

The predecessor of the performance-based wage system is piece-rate wages, but it is not a form of wages linked to the quantity of products in a simple sense, but a wage system based on scientific wage standards and management procedures.

The basic feature of the performance-based pay system is that the employee's remuneration income is linked to individual performance. Performance is a comprehensive concept, which is broader than the quantity and quality of products, which includes not only the quantity and quality of products, but also other contributions of employees to the enterprise. Although the performance salary paid by the enterprise to the employee also includes several main contents such as basic salary, bonus and welfare, it is not independent of each other, but organically combined.

According to the 1991 Fortune magazine ranking of 500 companies in the United States, 35 percent of companies have implemented a performance-based wage system, compared with only 7 percent 10 years ago.

Performance-based salary, also known as performance-based salary, merit pay or appraisal linked to the appraisal of wages, is based on the job position where the employee is hired, according to the technical content of the post, the size of the responsibility, the labor intensity and the environmental advantages and disadvantages to determine the post level, the total wage is determined by the economic benefits of the enterprise and the price of labor, and the labor remuneration is paid on the basis of the labor results of the employee, which is a wage system that closely combines the labor system, the personnel system and the wage system. Performance pay consists of four parts: basic salary, age salary, post salary, and incentive salary.

The performance-based pay system has its advantages, but it also has its shortcomings.

Performance-based salary: A system in which remuneration income is linked to performance.

Legal analysis: belonging to the category of wages, performance is divided into broad performance pay and narrow performance pay, and broad performance pay is also known as performance raise, incentive salary or salary linked to evaluation; Performance-based pay is based on the effective appraisal of employee performance, and the wage system that links wages with appraisal results is realized"Earn by your performance"。The post salary highlights the word "change", which is determined by two variables: the ability of the enterprise to pay and the market labor; In operation, it emphasizes the easy - easy salary, and the salary change of the post.

Performance-based wages highlight the word "hanging", which is formed by the excess profit commission of the enterprise, and is distributed according to the excess labor of employees, which is linked to the efficiency of the enterprise and the performance of employees.

Legal basis: Article 62 of the Labor Contract Law of the People's Republic of China The employer shall perform the following obligations:

1) Implement national labor standards and provide corresponding labor conditions and labor protection;

2) Inform the dispatched worker of the work requirements and remuneration;

3) Pay overtime pay and performance bonuses, and provide job-related benefits;

4) Conduct the necessary training for the dispatched workers on the job;

5) In the case of continuous employment, the normal wage adjustment mechanism shall be implemented.

The employer shall not re-dispatch the dispatched worker to another employer.

Regulations on the Personnel Management of Public Institutions" Article 32 The State shall establish a wage system for public institutions that combines incentives and constraints. The salaries of staff of public institutions include basic salary, performance salary, and allowances and subsidies. The distribution of wages in public institutions shall be combined with the characteristics of different industries and public institutions, reflecting factors such as job responsibilities, work performance, and actual contributions.

Legal analysis: Performance-based pay consists of four parts: basic salary, age salary, post salary, and incentive salary.

According to the "Provisions on the Composition of Total Wages", total wages refer to the total amount of labor remuneration directly paid by each unit to all employees of the unit within a certain period of time. Therefore, performance-based pay is a salary.

Legal basis: Labor Contract Law of the People's Republic of China

Article 11 Where the employer fails to conclude a written labor contract at the same time as employing the workers, and the labor remuneration agreed upon with the workers is not clear, the labor remuneration of the newly recruited workers shall be implemented in accordance with the standards stipulated in the collective contract; Where there is no collective contract or the collective contract does not provide for it, equal pay for equal work shall be implemented.

Article 20 The wages of a worker during the probationary period shall not be less than 80 percent of the minimum wage for the same position in the employer or the wage agreed in the labor contract, and shall not be lower than the minimum wage standard in the place where the employer is located.

Article 46 The distribution of wages shall follow the principle of distribution according to work, and equal pay for equal work shall be implemented. The level of wages has been gradually raised on the basis of economic development. The state implements macroeconomic regulation and control over the total amount of wages.

Article 47 An employer shall, on the basis of the characteristics of its production and operation and its economic benefits, independently determine the wage distribution method and wage level of its unit in accordance with law.

Article 48 The State implements a minimum wage guarantee system. The specific standards of the minimum wage shall be prescribed by the people of the provinces, autonomous regions and municipalities directly under the Central Government, and shall be reported for the record.

Legal analysis: Performance-based wages are considered wages, and performance-based wages belong to the wages stipulated in the labor law. The performance salary is composed of four parts: the basic salary, the age salary, the post work chain and the incentive salary, and the labor remuneration is paid according to the labor results of the employees.

The wage system is closely integrated with the wage system. The total amount of wages refers to the total amount of labor remuneration paid by the employer to the employee within a certain period of time. Therefore, performance-based pay falls under the category of compensation.

Legal basis: Article 4 of the Provisions of the People's Republic of China on the Composition of Total Wages The total wages are composed of the following six parts:

1. Hourly wages;

2. Piecework wages;

3. Bonuses; 4. Allowances and subsidies;

5. Overtime and overtime wages;

6. Wages paid under special circumstances.

Performance-based pay and base pay are two different concepts, and they do not belong to the same type of payroll item. A base salary is a fixed base salary that is usually negotiated between the employee and the employer in an employment contract and does not change depending on the employee's performance. Performance-based pay is evaluated and calculated based on the performance of employees, and is usually linked to the work performance of employees and the performance of the enterprise.

Therefore, performance pay is not part of the base salary.

In addition, there is a combination of base pay and performance pay and other salary items that make up the total compensation of an employee. For example, perks and subsidized mold pants, etc., these additional benefits can also have an impact on an employee's total salary.

In short, performance-based pay is not part of the base salary. Employers should clearly state in their employment contracts the employee's basic salary and performance-based salary, as well as the specific calculation of other benefits and incentive deficits, to avoid misunderstandings or disputes for employees.

Performance-based pay falls under wages. Performance pay is based on the effective assessment of employee performance, to achieve the salary and the assessment results of the wage system, composed of four parts: basic salary, age salary, post salary, incentive salary.

Total wages refer to the total amount of labor remuneration paid directly by each unit to all employees of the unit within a certain period of time, which is composed of the following parts: hourly wages; Piece; allowances and subsidies; Other.

[Legal basis].

Article 4 of the Provisions on the Composition of Total Wages is composed of the following six parts: (1) hourly wages; (2) Piece-rate wages; (3) bonuses; (4) Allowances and filial piety subsidies; (5) Working overtime and working overtime without hail pay; (6) Wages paid under special circumstances.

Performance-based wages belong to the workers' wages stipulated in the Labor Law. Performance-based wages, also known as performance-based salary increases, incentive wages or wages linked to evaluation, are based on the jobs in which employees are hired, determine the post level according to the technical content of the post, the size of the responsibility, the labor intensity and the advantages and disadvantages of the environment, determine the total amount of wages based on the economic benefits of the enterprise and the price of labor, and pay labor remuneration based on the labor results of employees, which is a wage system that closely combines the labor system, personnel system and wage system.

1. Wages as stipulated in the Labor Law.

1. The total salary argument consists of six parts:

1. Hourly wages;

2. Piecework wages;

3. Bonuses; 4. Allowances and subsidies;

5. Overtime and overtime wages;

6. Wages paid under special circumstances.

2. Items not included in the total salary:

1) Invention and Creation Awards, Natural Science Awards, Scientific and Technological Progress Awards, and payment of rationalization suggestions and technical improvement awards issued in accordance with the relevant regulations issued by the People's Republic of China, as well as bonuses paid to athletes and coaches;

2) Expenses related to labor insurance and employee welfare;

3) Expenses related to the treatment of retirees, retirees and retirees;

4) various expenditures on labor protection;

5) Manuscript fees, lecture fees and other remuneration for special work;

6) Meal allowance for business trips, meal allowances, travel expenses for transfer and settling-in allowances;

7) the risk compensation income of the lessee of the leased business unit;

8) Dividends (including stock dividends) and interest paid to employees who purchase the company's ** and bonds;

9) Medical subsidies and living allowances paid by the enterprise when the labor contract is terminated by the labor contract employee;

10) Handling fees or management fees paid to labor providers in addition to wages for the employment of temporary workers;

11) Processing fees paid to domestic workers and contract fees paid to contractors according to the processing order method; First demolition.

12) Subsidies paid to students enrolled in the work of enterprises;

13) Family planning subsidy for one child.

2. How to calculate the performance salary and how to determine the performance salary standard.

At present, there is no effective and consensus performance evaluation method, which is also the focus and difficulty of performance-based pay reform.

First of all, the performance appraisal method of public institutions should not be turned into a simple form of "counting work points," but should fully embody fairness and justice, and while standardizing the wage and allowance systems of public institutions, we should gradually form a rational mechanism for determining the level of performance-based wages, a perfect distribution incentive mechanism, and a sound distribution macroeconomic regulation and control mechanism.

Second, performance management should pay more attention to the inner enthusiasm of employees, so that they have a heartfelt love for the unit, a heartfelt sense of ownership, sufficient energy, and a high sense of responsibility.

Third, the reform of performance-based wages should standardize the use of funds by public institutions themselves, so that they can focus more on "improving the level of public welfare services".

Performance-based pay falls under wages. Performance-based wages, also known as performance-based salary increases, incentive wages or wages linked to evaluation, are based on the positions in which employees are hired, and determine the post level according to the technical content of the post, the size of the responsibility, the labor intensity and the environmental advantages and disadvantages, determine the total amount of wages based on the economic benefits of the enterprise and the price of labor, and pay labor remuneration on the basis of the labor results of the employees.

[Legal basis].Article 4 of the Provisions on the Composition of Gross Wages.

Gross salary is made up of the following six components:

1) Hourly wages;

(2) Piece-rate wages;

(3) bonuses; iv) allowances and subsidies;

5) Overtime wages;

6) The payment of Qiaohong wages and filial piety under special circumstances.