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Salary scales and how to maintain the market price for every employee in case of acquisition?
Salary scales and how to maintain the market price for every employee in case of acquisition?
Yasmein Hussein
Rewards Management Senior Manager
 
Salary scales and how to maintain 
the market price for every employee 
in case of acquisition?
 
 
 
Let’s talk first about the Salary Structures: Salary structures are an important component of effective compensation programs and help ensure that pay levels for groups of jobs are competitive externally and equitable internally. A well-designed salary structure allows management to reward performance and skills development while controlling overall base salary cost by providing a cap on the range paid for particular jobs or locations 
 
Setting salaries for your staff is always a tricky thing to do. It's especially hard if you've never done it before, you probably don't even know where to start. On the one hand, you want to pay enough to get the best possible talent. On the other hand, you don't want to overpay. What's an entrepreneur because to do?
 
First of all, remember that your goal is to attract good talent and pay them fairly. When it comes to the exact amounts you should pay, however, know this: You never want to pay more than the job is worth to you. That's just good business. Because at the end of the day, a salary is like any business expense--it's an investment, and you should get a return. So you begin by deciding the top amount you'd be willing to pay.
 
The next step is to figure out the least you'll pay. And that's where the market comes in. Market rates set candidates' expectations. Sometimes, the market underprices value. Truly excellent knowledge workers do ten times the work of merely good ones, but they're only paid 20 to 30 percent more. Other times, the market overprices value (can you say "Fortune 500 CEO salaries"?). Either way, candidates will expect you to at least pay market rates unless you can offer good alternatives.
 
In any Acquisition Strategy; Employee compensation and benefit plan are the key components of any acquisition strategy; their impact has become so great that they may actually dictate the structure of an acquisition. And each plan within the total compensation and benefits program of the acquired/merged company needs to be reviewed to determine it is impact. Not only individually, but also in the terms of outcome when it is combined with other plans. The effects of changes in salaries and wages are relatively straightforward.
 
And the key comparison is between the acquired company’s salaries and wages and those of the acquirer, as well as of other employers in the acquisitions industry. 
 
And the team of compensation professionals took a complete inventory of the two companies’ compensation policies, including executive management and general salary structures for every job titles, performance evaluations, incentives, save employees’ rights, and make sure to maintain the market price for every employee.
 
Barring any legal pacts to the contrary in mind, companies usually have the freedom to make changes to many elements of the total compensation package, which comprises base salary, short-term incentives (such as an annual bonus or profit-sharing), long-term incentives (such as stock options), benefits.
 
Whether you merge compensation plans or create a new one, big changes are in store for employees. To ease their uncertainty and fear, now it is the time to straightforward to communicate this strategy with them to put everyone in picture