According to PricewaterhouseCoopers’ PayWell salary survey the Czech job market is relatively stable from the remuneration perspective
20 September 2006 - The situation in the area of remuneration in the Czech Republic is relatively stable. Over the long term, companies most often show 5% salary growth and are abandoning guaranteed salary components in favour of performance-related ones. These are some of the main findings of PricewaterhouseCoopers’ latest PayWell 2006: Effective Management, Effective Remuneration survey.
Martina Wolfová, Manager in the Human Resource Services department, said:
“A priority of many companies remains to adjust or reassess the remuneration system so that it supports fulfilment of the firm’s strategy and achievement of strategic goals of the whole organisation, and consequently those of partial organisational operations, teams and individual employees. Through remuneration, firms attempt to eliminate certain negative employee behaviour such as increased absenteeism or ability fluctuation. Conversely, they try to motivate them to take an innovative approach and to take responsibility for their work and their team’s results.“
Focus on performance
More and more companies are utilising various forms of performance-related salary components for all employee categories. The highest growth was seen in the professional (81% vs 73% of firms last year) and administrative (71% vs 63%) categories.
The institute of the so-called guaranteed 13th and 14th paycheques (bonuses that are paid regardless of employees’ actual accomplishments or those of the firm as a whole) is slowly ceasing to exist.
A number of companies also base payment of performance-related bonuses on employee non-attendance, especially for employees in manufacturing. At the same time, a more negative form of motivation (reduced bonuses in the case of excessive non-attendance) continues to preponderate. This form of motivation is used for labourers in 56% of companies. Some firms take the approach of combining this with positive motivation, where in the case of low absenteeism the employee receives higher bonuses.
Pharmaceutical firms and banks are among the best paying companies
As in previous years, this year’s survey confirms that the market is relatively stable; year-on-year salary growth ranges from 4% to 5%. Survey participants planned to raise salaries somewhat less this year than actual growth in 2005 (4.8% vs 5.1%). The highest salary increase was planned by pharmaceutical companies and banks.
At the same time, these institutions continue to pay the highest (114% or 112% of the average in the entire Czech Republic), and also offer the highest starting salaries to both secondary-school and university graduates.
From the regional perspective, firms in Bohemia traditionally pay better than firms in Moravia. Excluding Prague, the difference between salaries in Bohemia and those in Moravia is about 11%.
Trends in provision of employee benefits
Apart from benefits in the form of work aids (e.g., company cars or mobile phones), the following benefits are most often provided:
|
Percentage of companies |
Refreshments at work |
85% |
Extra holiday for all employees |
82% |
Meal vouchers |
72% |
Superannuation |
70% |
Sporting events |
60% |
|
Martina Štìpinová, Senior Consultant in the Human Resource Services department, added:
“There is a continued trend in providing tax-efficient employee benefits that relate to work-life balance – benefits that better enable employees to combine their work and private lives. These benefits are very attractive to employees and what is more, utilisation of such benefits enables firms to achieve better results.“
The trend of the past few years – an increase in the number of firms that contribute to their employees’ superannuation schemes – continues (65% in 2005, 70% this year). Thirteen survey participants also stated that they planned to introduce this benefit, which is often part of the so-called optional employee benefit system currently used by one in four firms.
The number of companies that provide a fifth week of holiday is growing. This year, 82% of firms did this compared with 65% last year.
In comparison with last year, more companies are starting to use the so-called flexible work week, where employees start and finish work as they please but must work off the total work hours prescribed for the given week.
Likewise, an increasing number of companies are compensating their employees’ salaries during short-term illness by providing so-called sick days, where the employee may stay at home without having to obtain a doctor’s note (the entitlement is usually five days per year) while still receiving his usual salary. In 2003, 25% of firms provided this benefit; this year 36% did. By comparison, firms are abandoning salary compensation in the case of long-term illness (now usually only based on a doctor’s note). This year 18% of firms provided this benefit, compared with 28% in 2003.
A drop in the number of companies that provide loans to their employees can be seen over the long term. In 2003, 42% of companies did this; this year only 32% did – for obvious reasons, most of these were banks.
END
Notes to the editor:
- The PayWell study is composed of two parts:
- Salary survey (salaries from 1992, more than 270 positions, 12 sectors)
- Remuneration and employee benefits survey (latest trends)
This year, 142 companies from 12 sectors (automotive industry, banking and financial services, chemical industry, energy distributors, pharmacy, high-tech, construction companies, media, trade and distribution, industrial production, fast-moving consumer goods, transport and logistics) participated in the comparative study PayWell 2006: Effective Management, Effective Reward. The majority (76%) were companies with foreign joint venture.
- The PayWell study is prepared by PricewaterhouseCoopers´ Human Resource Services department. The services provided by this department include: support to Czechs working abroad and foreigners working in the Czech Republic; proposal, structuring and implementation of reward and benefit policy systems; employee taxation; HR solutions following acquisition or merger integration; strategic management approach to HR; effective management and recruitment of employees.
- PricewaterhouseCoopers (www.pwc.com) provides industry-focused assurance, tax and advisory services to build public trust and enhance value for its clients and their stakeholders. More than 130,000 people in 148 countries across our network share their thinking, experience and solutions to develop fresh perspectives and practical advice.
“PricewaterhouseCoopers” refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.
