There are different kinds of incremental systems which vary in their rigidity and flexibility. At one end you have extremely rigid procedures with fixed and predetermined movements through a scale related to age, service in the organisation or experience in the job, while at the other end there are flexible systems in which management exercises complete discretion over the award and size of increments without any guidelines. Between the two extremes there are middle-ranged, semi-flexible systems.
The choice of approach will naturally depend on the organisation, climate and managerial style of the organisation. A bureaucratic organisation is likely to believe in strict control over managerial judgements by using a rigid system of salary administration, while a less autocratic organisation which allows the managers to exercise discretion who adopt a more flexible system.
While there is no doubt about exercise discretion would adopt a more flexible system. While there is no doubt about the advantages of a flexible system, we must at the same time be aware of the need to exercise control over the salary system (which we will discuss a little later).
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It is extremely important to ensure that individuals are correctly placed in their range in relation to their performance and also that they move through and between salaries grades at a rate appropriate to their progress and potential.
Most salary planning decisions are short-term ones which are concerned with deciding on the next increment to be paid because of merit or promotion. Long term salary plans are closely linked with career planning procedures.
Short-term salary planning can be carried out by means of a variable incremental system with guidelines which will indicate the various rates at which people can progress through a zoned salary range.