The form of paid popular today, including: paid time to time, paid according to the product, pay exchange, paid by revenue KPI. Each form has advantages, limitations and suitability to each type of different businesses. The choice of the form of a salary appropriate to help businesses optimize costs to ensure the motivation retain talent.
Depending on the particular industry, the volume of work and business strategy, the business can apply as many forms as paid by the time, by product, by revenue or by exchange. Each method has advantages, limitations, private, directly affecting work motivation, engagement, effective production and business.
Understand the pros and cons of each form not only help construction business policy pay transparency, efficiency but also ensure full compliance with the principle of payment according to current labor law. The same Lac Viet Computing learn the form of paid downloads in the business today.
1. Concept and meaning of the form of payroll
The form of payroll is the method of business applicable to determine the pay for employees based on the basis of the agreement, the volume of work, time of work or results achieved. This is important element in human resource management because it directly affects the satisfaction of employees and the ability to control the budget salary.
For example, a manufacturing enterprise can be paid by products to encourage increased productivity, while a service company usually applied form of payroll from time to time to ensure steady income for employees.
Meaning with business and workers
- For business: choose from form-fitting to help optimize personnel costs, encourage work performance, maintaining competitiveness on the labor market. A mechanism reasonable wage also minimize the risk of labor disputes, thereby saving the cost of legal management.
- For labor: Paid clear transparent fair will create trust, motivation and encourage professional development. According to the report of the Organization international Labor office (ILO) in the year 2023, transparency in pay wages to help decrease to 20% of likely employee leaves the company within 12 months of work.
In Vietnam, The Labour code 2019 (Article 94 and Article 95) clearly stated principles pay: corporate pay salary directly in full on time; not distinguish gender in the pay wage; guaranteed salary not lower than the minimum wage due to state regulations. Adopting the form of payroll in business should be based on agreement with the employee, in accordance with the characteristics of work at the same time ensure the rights of both parties.
2. The form of paid downloads in the business today
Below are details on 8 ways to pay wages in the enterprise helps managers understand the characteristics, advantages and disadvantages, how to apply efficiency ensure both compliance with the principle of payment according to the labor law, both optimal cost just create motivation for employees.
2.1. Form pay over time
Pay over time is the method of salary calculation based on the time actually worked by the employee, may charge by the hour, day, week or month. This is the most common form in the industry requires the stability of working time rather than number of finished product, for example: office, administration, protection of customer care.
Base rules:
- Article 96 of The Labor 2019: workers are paid over time based on the wage scale and payroll taxes due to the construction business.
- Decree 145/2020/ND-CP: Business to publicly distance calculator ensures no lower than the minimum wage.
Business specific rules: salary, months, weeks, days or hours in a labor contract.
For example: A staff administrative salary 12.000.000, if in month working full number of days as specified (for example 26 days), you'll get full pay. If leave without pay 2 day salary will be deducted respectively.
Distance calculator
- By month: month Salary = salary agreement / number of working days standard × number of days actually worked.
- According to day/time: day/hour = month salary / number of days or hours worked standard × number of days/hours actually worked.
For example, Employees whose salary 12.000.000 VNĐ/month, 22 days will be paid 12.000.000 VNĐ. If 20 days, the salary received = 12.000.000 / 22 × 20 ≈ 10.909.000 VND.
Value of benefits for businesses:
- Easy to manage, cost estimates for the hr: Business can calculate the fixed salary every month, advantageous in financial planning.
- Encourage stability and commitment: employees tend to stick for a long time when steady income, don't depend too much on fluctuations in output.
- Meet the requirements of the law: this form is consistent with the principle of payment is stated in The Labor code of Vietnam, guaranteed the rights of the minimum wage, working time.
Restrictions
- Not directly reflect the performance of the individual.
- If not combined KPI or performance bonuses, which can lead to psychological work “full time”, not “sufficient quality”.
2.2. Form paid according to the product
Piecework is the adjective form of salary based on the amount and quality of the product or service that the employee complete. Can apply to industrial production, machining, industry, service is the output measurement is.
Base rules:
- Article 96 of The Labor 2019: Business/employee agreement is paid according to the product.
- Circular 10/2020/TT-BLDTBXH: form of the product must be associated with the level of labor, process quality inspection.
Specify the product must be reasonable, having consulted the workers are not placed too high to force.
For example, A worker may get 5,000 coins for each shirt standard. If that month may 2.000 pcs, income will be 10,000,000, not bonus pass output.
Distance calculator: Salary = Single product price × Number of standard products.
For example, workers may, with a price tag of 25,000 VND/jacket, complete 200 jacket/month-standard wage = 25.000 × 200 = 5.000.000 VNĐ.
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When should I apply: manufacturing, machining, agriculture, food processing where the product is clearly quantified.
2.3. Form of paid exchange
This is a form of pay that business and labour (or labor) agreement before a salary fixed to complete the package a volume of work or specific projects, in the specified time.
Salary does not depend on the number of days of work, duration of labor, or the number of hours the, which is based on the final result. Can apply for individual or group with the contract clear about the scope of work, standard quality, mold delivery time.
Base rules:
- Article 96 of The Labor 2019: allow business agreement with the employers to pay wages that exchange by volume, the quality of work.
- Business to describe the volume of work, standard quality, time limit for completion in the contract/agreement.
Guaranteed salary exchange last not less than the minimum wage if dividing the average by the time of work.
How to specify salary
- Based on volume, the difficulty of the work.
- Reference costs, the expected time to complete.
- Can plus bonuses if the delivery deadline or quality of exceeding requirements.
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For example apply
- Exchange construction of the rough, a work item built-in 45 days.
- Exchange machining 1,000 products furniture within 2 months.
- Exchange service maintenance IT system in 3 months, including troubleshooting, periodic maintenance.
Note management
- Need to sign a contract or clear agreement on scope, quality, schedule, criteria for acceptance, and payment method.
- Should have the mold test between states to promptly processed if the progress or the quality is not reached.
2.4. Form paid by the revenue or commission
Income is calculated based on a percentage of revenue, contract value, or profit that employees bring to the business. Often combination of sticky wages (guaranteed minimum level of income) and payroll software (commission/revenue). The commission percentage can be fixed or under the ladder (revenue higher, percent larger).
Base rules:
- Article 96 of The Labor 2019: Enterprise have the rights agreement, paid by revenue, rose, for stars transparency.
- Business must be clearly stated in the contract of employment or wage policies, including: Rate % commission or by revenue. Time to pay (month/quarter).
Salary pink flowers must be calculated into wages as a base of SOCIAL insurance contribution if paid regularly.
How to determine the roses
- Based on the profit margin of the product/service.
- Consider the face by the market, competition policy in the industry.
- Can adjust according to each stage of business or each group of products.
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When to apply: parts trading, brokers, insurance, real estate, financial consulting, advertising services. The industry has the value of the contract or time latch single long.
For example apply
- Employees, real estate brokers, get 2% of the value of apartments for sale success.
- Business software get 10% on the contract value services to sign new.
- Counselor insurance get commission according to each insurance package customer purchases.
Note management
- Building regulations roses transparent, public, way, time of payment.
- Combined training, selling skills, professional ethics to avoid risk commitment false.
2.5. Pay flexible (Flexible Pay)
Pay flexible model is a combination of methods to pay different salaries in the same structure, income, for example: the salary is fixed by the time (to ensure stability) + salary fluctuations in product, performance, or business number (motivational). The goal of this form is to ensure both stable source of revenue for the staff, just create incentive for them to improve productivity.
Base rules:
The Labor code does not have the term “wage flexibility” but allows business owners build mechanism, paid for, why not lower than the minimum wage, public workers.
Businesses often applied in pattern:
- Sticky wages (fixed): ensure the minimum standard of living, grounded in SOCIAL.
- Wage soft (flexible): association with job performance, bonus, benefits.
Specific provisions in the regulation on the payment of wages, bonuses issued internal.
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Object suitable business:
- Scale business medium/large, active multi-sector or have many kinds of different positions (administrative, production, sales...).
- Organizations want to move from pay hard to model elements recommended but still keep stability.
2.6. Paid according to performance (KPIS/OKRs)
This form is mounted directly to the income of employees with the work results, based on indicators that measure efficiency (KPI) or target – result key (OKRs). Wages are usually composed of a fixed part + bonus/commission based on the results achieved against the objectives set out.
Base rules:
The Labor code 2019 allow enterprises to build the rating system and paid according to performance, for transparency, can consult with the representative organization of EMPLOYEES (if any).
Business often prescribed:
- Basic salary (fixed) guaranteed not less than the minimum area.
- Salary performance based on the results of complete KPI/OKR be unified from the beginning.
KPI/OKR, reward mechanism must be issued in regulation of remuneration notice to the entire staff.
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Object suitable business:
- The business can measure work efficiency clear, especially industry, sales, marketing, project management, production by production.
- Organizations have a culture of transparency, result driven, ready-investment rating system work efficiency.
2.7. Paid by the job title, work location
This is a form of pay to popular tradition, based on ranks, titles or job position that workers undertake. Wages are usually associated with system pay scale due to the construction business in accordance with the law, the organizational structure.
Base salary:
- Job description (Job Description).
- Frame the salary scale according to titles.
- Ask about qualifications, skills, responsibilities of each position.
Applicable objects:
- Office staff, managers, and professional staff.
- Businesses have clear management, medium and large scale.
Formula:
Salary = basic salary under the titles + (allowances if available)
For example:
- Hr: basic Salary 20.000.000 VNĐ + allowances responsibility 2.000.000 VNĐ.
- Staff C&B: base Salary 12.000.000 VNĐ + allowances lunch 1.000.000 VND.
Food receipt of hr = 22,000,000 VNĐ/month.
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2.8. Pay according to ability level (Competency-based pay)
This form is based on the competencies, skills, qualifications, level of proficiency, expertise of staff. Salary depends not only on position but also on personal value created for the business.
Base salary:
- Frame capacity (Competency Framework) is the construction business.
- Degree or professional certificate.
- Capacity assessment periodically (according to the matrix power).
Applicable objects:
- Technical personnel, experts, programmers, creative staff.
- Business in the field of technology, professional services, consulting.
Recipe: Salary = basic Salary position + (coefficient of capacity × correction Level)
For example:
- Basic salary location programmers: 15.000.000 VNĐ.
- The coefficient of capacity (as assessed skills, certifications, experience): 1.2.
- Level adjustment: 5,000,000 VND.
Food get = 15.000.000 + (1.2 × 5.000.000) = 21.000.000 VND/month.
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3. Should choose the form of paid how? The selection criteria suitable for business
Choosing the right method to pay wages not only decided to effective hr management, but also directly affect the ability to retain talent and competitiveness of the business. A form of paid accordingly to ensure both meet the principle of pay under the labor laws, medium optimization, budget, medium, motivational work.
3.1. Scale, industry activity
Large-scale enterprises often applied in combination in many forms paid to matching the diversity of location, parts.
For example: office block paid from time to time to ensure the stable block production by applying the paid according to the product to boost productivity. In contrast, small business or startup is usually preferred mechanism to pay wages, flexible, associated with the result of the work to reduce the pressure fixed costs.
3.2. The nature of work (quantitative or qualitative)
- With work that yields easily measured (e.g., apparel, manufacturing components), paid according to the product help pinned income with actual results, motivational markedly.
- With the qualitative (consulting services, content creation), way paid by time or according to the project to help ensure a stable income, at the same time easy to control the quality.
Choosing the wrong form can cause an imbalance: productivity does not increase, although the cost of personnel or staff lack motivation because income does not reflect the effort.
3.3. Strategic goals of the business
If the goal is to increase productivity in the short term, businesses can apply form paid securities or according to the product. Conversely, if the priority retain talent, wage policies need to combine between the fixed part (base salary from time to time) and the volatility (bonus according to performance).
3.4. Regulatory factors, transparency
All forms of pay in the enterprise must comply with the principle of payment according to the law of labor: paid in full, on time, irrespective of gender, not lower than the minimum wage. Besides, transparency in the way payroll is the key element that helps build confidence limit disputes.
For example, if applicable, pay method according to the product, businesses should announce clearly the level, standard quality, how to determine the unit price of the product. Transparency helps employees understand and believe in the wage mechanism, while protecting the business before the legal risks.
4. The optimal solution process payroll with hr software
In the context of business must manage many forms pay different salaries as paid by duration, by product or by revenue, the calculation is not only time-consuming but also the potential risk of errors. Software hr management modern bring the benefits highlights:
- Process automation salary calculator: The system has the ability to synthesize data from attendance systemoutput, KPI... to payroll calculations accurately. This helps to reduce up to 90% errors due to input manually, at the same time shorten the time, payroll processing from several days down to just a few hours.
- Ensure compliance with legal regulations: the management software, payroll be configured according to the current labour code, to correctly apply the principles of pay, the minimum wage regulations on overtime, holiday, new year, deductions filing insurance to help businesses limit the legal risks, labor dispute.
- Save cost management: According to a survey by CIPD 2024, the business application solutions payroll automatically save an average of 20-25% of the cost of personnel management, by reducing the volume of administrative work and limited to outsource services salary calculator.
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- Tightly integrated modules: Data from attendance management, production, KPI and contract labor is related more help payroll consistently accurate.
- Automatically apply diverse forms of wage payment: Whether firms pay wages according to the product for workers, according to the time for office staff or sales for the business division system are processed at the same time ensuring the rule of pay transparency.
- Report analysis personnel costs in real time: The leader can see the total cost of salaries, bonus, comparing fluctuations between the states to make decisions timely adjustment.
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The choice of the form of paid not just a matter of compliance with legal regulations but also the strategic hr management important direct impact on work performance, operating costs and the ability to retain talent. Businesses need to carefully consider between characteristics industry, production model – business, objects of labor, as well as development goals, to apply the method paid accordingly.
