Base Salary and Performance

The base salary and the performance of the employee are not attached together. The base salary is not a good HR Tool to increase the performance and efficiency of the organization or the individual employees.

The base salary is paid as the monthly minimum and the manager has a very a weak chance to decrease the base salary, when he or she is dissatisfied with the performance of the employee.

The organization has always analyze in detail the potential position of the organization on the job market. The organization with higher base salaries can achieve worse results than the cost efficient organization paying low base salaries.

The base salaries can have the impact on the retention of employees, but when the corporate culture is bad and the employees do not like their managers, they will leave and the high base salary will not prevent them from doing it.

The organization with the performance issues and the high fluctuation of employees has to consider the change of the compensation policy. The organization has to adjust the compensation components to increase the total cash of employees and it should not focus just on the base salary.

The base salary should be increased as the reward for developing the skills and competencies, the base salary is not a payment for the performance. The bonus is paid for the performance, the base salary is the investment of the organization into the future.