## Pay mix

It refers to the value of every element from the compensation package expressed as a percentage from the total compensation value.

Calculation steps:

1. choose employee
2. identify the values for each compensation element received by the employee
3. calculate the value of the compensation package
4. express each compensation element value as percentage from the total amount

Relevant dimensions: company, level, job family, department, performance.

The pay mix you offer at company level and at job level will determine the profile of people that you will attract and convert in employees.

Example:

Let's say we have an employee that received last year the following gross amounts:

1. Basic pay (salary) per month - 1000
2. Christmas bonus - 1000
3. Performance bonus - 2000 - twice a year
4. Sales bonus - 3000 - once a year

We will refer mix to Total cash:

Total cash = (1,000 x 12) + 1,000 + (2,000 x 2) + 3,000 = 20,000

Total cash = 12,000 + 1,000 + 4,000 + 3,000 = 20,000

Calculation:

• Basic pay = 12,000 / 20,000 = 60%
• Fixed guaranteed pay = 1,000 / 20,000 = 5%
• Short term variable pay = (4,000 + 3,000) / 20,000 = 35%

Total cash Pay mix: 60% + 5% + 35%

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