Disbalance in Pay Structure of Employees in Federal Budgetary Institutions

Olga V. Bogacheva and Oleg V. Smorodinov ()
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Olga V. Bogacheva: Financial Research Institute, Moscow, 127006, Russian Federation; Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (IMEMO), Moscow 117997, Russian Federation
Oleg V. Smorodinov: Financial Research Institute, Moscow, 127006, Russian Federation

Finansovyj žhurnal — Financial Journal, 2020, issue 6, 113-125

Abstract: Among other things, the introduction of new pay systems in Russian federal institutions (2008) resulted in rapid growth of the variable part of wages. In the early 2010s, in numerous institutions this figure exceeded 50 %, and it still remains at an unreasonably high level. It is known, from the history of labor relations, that violation of balance between fixed (salary) and variable parts of wages leads to a reduction in motivation levels of employees and, as a consequence, to deterioration in productivity indicators and labor quality. In OECD countries, at the legislative level, the concepts of base and full rates of pay are introduced, and the number and size of incentive and compensation payments are optimized. The rates of base pay are regularly reviewed, taking into account changes in consumer prices and the cost of living. This practice allows a reasonable balance to be maintained between fixed and variable parts of wages. At the level of institutions, competency standards are being developed that ensure optimal differentiation in the size of the fixed part of wages and minimize the possibility of making incentive payments to employees simply for the performance of their job duties. The purpose of the article is to develop proposals for solving the problem of imbalance in the structure of wages of employees at Russian federal institutions, based on modern foreign practice in this area.

Keywords: new pay systems; fixed and variable pay; base pay; incentive rewards; standards of professional competencies (search for similar items in EconPapers)
JEL-codes: J30 J31 J38 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:fru:finjrn:200608:p:113-125

DOI: 10.31107/2075-1990-2020-6-113-125

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