Under the supervision of Miss

SAOULI Tasaadit

Salary
STRUCTURE
“The importance of salary structure for the financial and
economic function of the organization.”

PRESENTED BY:
KHELIL Fatiha MFE
MAACHOU Manel Meriem 2023-3024
PLAN
Introduction
• The steps of designing wage structure
• Grade pricing
• The economical and the financial
impact
• Study case
Conclusion
 HOT INTRODUCTION
TIP
The variance of wages across individuals is a summary statistic that means many things. Wage
variance is an indicator of income inequality: high variance suggests high income inequality. But
the "wage structure" of an economy - or the mean and the variance of wages - is also an indicator of
the degree to which some individuals invest in human capital, the degree to which they work hard in
response to incentives, the rates of return to human capital investments, and institutional factors that
shape wage determination. Thus far, economists have had data on the distribution of wages across
individuals in the economy, but not on the distribution of wages across individuals. Now with new
matched employer-employee data sets, we can look at the structure of wages as well as across
individuals. New questions can be raised and addressed empirically.
T he ba si c w ay 1

Determine goals and strategies

OF preparing
h e w ag e s t ru ct u r e 2
T Surveying the organization’s environment

1 is in the processes
The role of human resources 3
of designing the wage structure, evaluating jobs,
Too complicated
and studying wages in other organizations and
the(finding it hardAs
labor market. to for
spend less thanthey
managers, we propose
earn) Design the pay system
the wage categories with which new employees
can start, and suggest wage increases,
allowances, and bonuses before they are
approved by human resources. They also provide
4
information to management. Human resources to
evaluate jobs. Maintenance of the Salary system
A The steps of designing
wage structure
1- Determine the preliminary
Description
decisions to prepare the structure

2- Choosing a job evaluation

method + laying the foundations Showcasing job openings on our dedicated careers page.
for the evaluation method

3- Implementing the evaluation Utilising industry-specific job boards and professional

process networks.

4- Define job structure Leveraging social media platforms.

Tailoring advertising campaigns to reach specific candidate

5- Grade pricing
demographics.

Engaging with diversity-focused networks and

6- Salary structure management
organisations.
A 1- Determine
evaluation factors

1 2 3
Responsibility Experience Education & Formation

4 5 6
Skills Working conditions Efforts
 A 2- Divide evaluation factors
into sub-elements

2 3 4 5 6
Experience Education Efforts
• Years of Experience
Skills Working
& Formation • Mental
• Nature of work • Educational Qualification • Specialized interview result Conditions
• Company type and size • Risks • Physical
• Postgraduate
• Training courses in the • bad conditions
field of work.

1
Responsibility
• About the safety of subordinates
• About the safety of equipment and raw materials
• About training new employees
• About quality
A 310

100
Responsibility

Experience

3-Giving the
Education
&
evaluation
100 Formation
factors points
according to
80 Skills
practice

Working
120 Conditions

Efforts
250
 A
Factors and their components levels
Points
Lowest few Meduim Highest
Responsability 310
About the safety of subordinates 100 25 50 75 100
About the safety of equipment and raw 80 20 40 60 80
materials
About training new employees 50 5 20 30 50
About quality 80 20 40 60 80
Experience 100
Years of Experience 50 5 20 35 50
Nature of work 25 5 15 20 25

4-Distribution Company type and size 25 5 15 20 25

Education and 100
formation
of Educational Qualification 50 5 20 35 50
Postgraduate 25 5 15 20 25
sub-element Training courses in the field of work 25 5 15 20 25
skills 80
points into levels Specialized interview result 80 20 40 60 80
Work conditions 160
bad conditions 80 20 40 60 80
Risks 80 20 40 60 80
Efforts 250
physical 100 30 50 70 100
Mental 150 35 70 105 150
B Grade Pricing
In general, the pricing of job grades depends on the policies and
practices implemented by the company or institution. Pricing job
grades is influenced by several factors, including the local labor
market, industry sector, company size, job requirements, employee
skills, and other factors.

Generally, the pricing of job grades is determined through

wage studies and market interviews to understand whether the
offered salaries are competitive and in line with the market value
of the positions offered. There may also be additional factors that
influence pricing, such as legal and regulatory factors and human
resource policies within the company.
C The financial and
economic affect

FINANCIAL EFFECT
Competitive salary structures boost employees' spending power, driving economic growth.

Increased economic activity generates revenue and expansion opportunities at local and national levels.

Salary structures reflect an organization's financial strategy and growth objectives.

Well-aligned salary frameworks enhance investor confidence.

Effective management of human capital costs is crucial for long-term success and investor trust..
C The financial and
economic affect

ECONOMICAL EFFECT
Cost Control and Profitability:
Well-designed salary structures are crucial for financial management.
Balancing cost efficiency and talent retention drives business success.

ROI in Human Capital:

Salaries as investments influence productivity.
Competitive compensation enhances financial outcomes.

Budgeting and Forecasting:

Clear salary structures aid in accurate budgeting.
Informed resource allocation improves financial management.
Economic Implications:
Salary structures impact aggregate demand, income distribution, and productivity.
Fair and competitive structures contribute to sustainable economic development and improved living standards
D STUDY CASE
Professors wage structure

Article 4: After performing the service, the employee is entitled

to a salary comprising the following:
• Basic salary
• Allowances and compensations.
Article 5: The basic salary is derived from the product of the
minimum indexing number of the rank order to which the
indexing number corresponding to the occupied grade is added.
And the basic salary is derived from the product of the minimum
indexing number in the value of the indexing point.
Article 6: The basic salary compensates for the basic legal
obligations of the employee.
Article 7: Compensation compensates for special allowances and
benefits associated with the exercise of certain activities, as well
as the place of work and its specific conditions.
And the allowance compensates for productivity and
performance.
Article 8: The value of the indexing point is determined by the
provisions stated in Article 5 above, at forty-five Algerian dinars
(45 DZD).
D Profe s sors wa ge s truc tu re
The salary of a university professor consists of the following components:

1- Base salary
2- Professional experience compensation
3- Pedagogical experience compensation
4- Positional compensation (specific to certain regions)
5- Supervision or management compensation
6- Documentation compensation
7- Regional compensation (specific to certain regions)
8- Housing compensation

The sum of these elements constitutes what is known as the gross salary. The gross salary is
subjected to a deduction for social security, typically at a rate of 9%. This deduction is
calculated by multiplying the gross salary by 0.09. The resulting value is subtracted from the
gross salary to obtain the net salary.
D Profe s sors wa ge s truc tu re
Action Item Point Person

University professors are classified according to Article (67) of the

basic law for the research professor: For example: An assistant
professor is classified in Section (B) as: outside the class, sub-
It is the salary corresponding to the classification of the professor based on their qualifications in the section -1: with a minimum indicative number of 930. The base
Base salery National Salary Network and in the basic law specific to the research professor. salary is calculated by multiplying the minimum indicative number
by the value of the indicative point (= 45 Algerian dinars). For
example: The base salary for an assistant professor in Section (B)
= 930 * 45 Algerian dinars = 41,850 Algerian dinars.

Professional It represents the progression of years of seniority for the employee from Grade 1 to Grade 12. We refer Example: A professor at Grade 1: The indicative point for
experience to the following table for its calculation: Of course, a new employee starts at Grade 0, which means they Grade 1 = 47. The value of experience compensation =
compensation
do not benefit from experience compensation. 47 * 45 Algerian dinars = 2,115 Algerian dinars.

Established by the following executive decrees: A- Decree No. 95-28 dated January 12th B- Decree No. 95-300 dated
October 4th
First Zone: 150% of the basic salary for the rank according to the old classification, covering the regions of the Greater
South, namely Adrar, Tindouf, Illizi, and Tamanrasset.
Second Zone: 120% of the basic salary for the rank according to the old classification, covering the regions of Béchar, El Assistant Professor at Tamanrasset University: Promoted
Positional Bayadh, Ouargla, and Ghardaia. to the first rank:
Third Zone: 100% of the basic salary for the rank according to the old classification, covering the regions of El-Naâma, El Basic Salary = 880 * 19 = 16,720 + (62 * 19 = 1,178) =
Compensation: Oued, and El Oued. 16,720 + 1,178 = 17,898 DZD
Fourth Zone: 80% of the basic salary for the rank according to the old classification, covering the regions of Khenchela, Compensation = 17,898 DZD * 150% = 17,898 * 1.5 =
Tebessa, M'sila, Saïda, Guelma, Tiaret, Batna, Oum El Bouaghi, Tissemsilt, Souk Ahras, Biskra, and Djelfa. 26,847 DZD
We mentioned that this compensation is calculated based on the basic salary. Basic Salary = Base Salary + Professional Experience
Compensation
D Profe
Secondly:
s sors wa ge s truc tu re
Calculation of the gross salary subject to tax Gross salary subject to tax = Gross salary - (7+8) (meaning the region compensation
and housing compensation)
Thirdly:
Comprehensive income tax (IRG) It should be noted that the value of the comprehensive income tax is reduced by 50% in the
southern regions. This means we take the value in the table and divide it by two.
Fourthly: Net salary Net salary = Gross salary - (Social Security deduction + IRG value).
Secondly: Compensation It represents the progression of years of seniority for the employee from grade 1 to grade 12. We refer to
the following table for its calculation: Of course, the new employee is in grade 0, meaning they do not benefit from professional
experience compensation. For example, an assistant professor in grade one: The reference point for grade one = 47. Value of
professional experience compensation = 47 * 45 DZD = 2115 DZD.
Thirdly:
Pedagogical Experience Compensation It also represents the valorization of pedagogical or educational experience for the
professor. It is based on Presidential Decree No. 02-334 dated October 16, 2002. It is an additional increase for the professional
experience compensation at a rate of 2% of the base salary for the rank for each reference point. How is this compensation
calculated? It is calculated first according to the old classification because it is compensation, and it is known that compensations
and grants are currently calculated according to the old system. First: Old classification table: Example: Assistant Professor,
Department (B), promoted to the first grade: The old assistant professor classification: 880. Multiplied by 19 (which is the value of
the reference point for senior positions, where previously the university professor was treated as a senior employee in the value of
the reference point, such as the department head, governor, director, minister, and others...) The value of the first grade in the old
classification = 62. So: 1 (first grade) * 2% * 880 * 19 = 0.02 * 16720 = 334.40 DZD. This is the pedagogical experience
compensation for an assistant professor, Department (B), at their first grade (i.e., after spending two and a half years since
appointment).
 AN
EXAMPLE
 CONCLUSIO
N
In essence, the salary structure serves as a linchpin that
aligns financial objectives with talent management
strategies. Its careful design and implementation are
essential for achieving a harmonious balance between the
organization's financial health and its ability to attract,
retain, and motivate a skilled workforce. By recognizing the
integral role of the salary structure in both financial and
economic contexts, organizations can position themselves
for long-term success and competitiveness.
 Bibliography

• Edward P. lazear and Kathryn L. shaw , An international

comparison The structure of wages , national bureau of
economic research, 2009.
• Mark W.leiserson and Jacques Leacaillon and Jean marchal and
J.R Crosseley , wage structure in the theory and practice ( three
studies ) , north-holland publishing company Amsterdam.
• https://www.scribd.com/presentation/416228026/-‫هياكل‬-‫اعداد‬
‫االجور‬
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