What is 3P salary?
3P salary is a salary calculated based on 3 main factors, including:
- P1 (Position): Salary based on each position
- P2 (Person): Salary commensurate with capacity
- P3 (Performance): Salary based on performance
What are the benefits of 3P salary?
3P salary is beneficial for both enterprises and employees. While the traditional salary calculation method is only one-sided on the basis of seniority and qualifications, 3P salary is commensurate with the values and efforts that the employees put in.
For enterprises, 3P salary helps:
- Create transparency when paying salary, thereby attracting talented people and keeping them to be attached to the enterprises.
- Motivate the employees to make efforts and improve work performance.
For employees:
- Receive a salary worthy of their contribution.
- Feel happy when working at the enterprises, ensuring physical and moral life.
How to calculate 3P salary properly?
![](/images/upload/2024/03/effective-salary-calculation-way-in-accordance-with-3P-system.png)
Proper and effective salary calculation way in accordance with 3P system
Because it is composed of 3 P factors mentioned in the concept section, the 3P salary calculation formula will be P1 + P2 + P3.
Step 1: Building salary framework P1
First, the enterprises should develop the following elements:
- Corporate structure.
- Title system.
- Salary structure.
Hence, set up a salary scale for each working position.
Step 2: Building salary framework P2
The enterprises should establish a clear competency framework and evaluation system. Specifically, inclusive of:
- Clearly understanding the requirements for capacity and responsibility of each position.
- Developing a system including regulations and guidelines for personnel assessment, salary increase and promotion mechanisms.
- Assessing capacity in accordance with 3 groups: A – S – K (Attitude – Skill – Knowledge)
Step 3: Building salary framework P3
- Determining the goals to be achieved for the enterprises
- Allocating the goals to each department => each position
- Determining salary and bonus calculation formulas based on KPI (results, efficiency)
- Assessing work performance periodically monthly / quarterly / yearly.
For further advice on the 3P salary calculation method or use of an outsourced salary calculation service, please contact HR2B hotline.