Wing Commander Samuel Allotey, Human Resource Manager of Stanbic Bank has stated that it is bad for organisations to cut the salaries of workers as a means of reducing cost. “Some organizations might think that by doing this they are reducing costs, though research has shown that in most organizations, salaries contribute to over 40 percent of total costs. This rather leads to staff discontent, feelings of being under-valued, staff disengagements and ultimately low productivity,” he explained. Wing Commander Allotey emphasized that stakeholders and organisations must understand that salaries are important to every worker. If organizations really want to use salaries as a tool for increasing productivity, then they must be ready to set up transparent and effective pay structure, he noted. This, he stated, would boost employee satisfaction which would increase productivity. “Consequently, a well-designed pay structure should have four key objectives: must be externally competitive in relation to firms within the industry; must be internally consistent and perceived as fair across job functions and departments within the organization; must be legally compliant with statutes and regulatory requirements; and must engender good governance principles in pay administration.” In this regard, he mentioned that accurate market data is essential if the right pay decisions would be made since inaccurate data could lead to a disaster. “Stanbic Bank, for example, has a pay policy which seeks to reward high performers and penalize poor performers every month. The bank therefore places emphasis on incentives, bonus and merit schemes to reward workers who contribute in raising and maintaining the success chalked by the bank,” Wing Commander Allotey said. He therefore advised organisations to periodically review their pay structure to ensure that it effectively meets pay standards and objectives of organisations. He suggested that there should be a remuneration committee that would involve stakeholders from all sectors of the organisation. Source: Daily Guide