Keys And Benefits Of Investing In An Extraordinary Pay Policy

Keys And Benefits Of Investing In An Extraordinary Pay Policy

Did you know that 66% of Spanish workers are dissatisfied with their salary ? And that a quarter of Spaniards want to change jobs in the next year?

These data, extracted from the studies New labor trends in Spain (Amazon and IPSOS) and Global Workforce of the Future 2022 (The Adecco Group in Spain), show the importance that wages still have when it comes to continuing, or No, in a job.

In fact, it is the main reason for the decision, according to the same study by the Adecco Group, which also found that 55% of the Spanish surveyed stated that they would leave their post in the next 12 months to get a higher salary.

This wage malaise is one of the reasons that has led the business fabric to suffer an increase in employee turnover.

The first edition of the Adecco Job Rotation Report in Spain states that the annual average is 17%. And an overwhelming fact: only 6.5% of companies have managed to reduce this staff turnover in the last twelve months.

These mobility rates have a direct impact on companies : increased costs, decreased productivity, loss of talent, demotivation…

To stop this situation in your company or to avoid it in the future, and as a leader in people management, Do you know what the benefits of investing in an extraordinary pay policy are and how it would help your company?

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Extraordinary Payments, How Do They Work In Spain?

In Spain, extraordinary payments are a type of compensation that companies offer their employees at special times of the year.

According to Article 31 of the Workers’ Statute , employees are entitled to two extra payments a year, one at Christmas and the other depending on the collective agreement or agreement between the employer and the legal representatives of the workers.

The amount of the payments depends on the time worked in the company during the year and is quoted monthly, although they are only charged in two payments (it can also be prorated if an agreement is reached).

How Bonuses Are Calculated

The extra payments in Spain begin to be generated, as a general rule, with the date of the previous payment of the payment. For example, if a worker joined in December 2022, he will be entitled to 100% of the December 2023 pay if he has worked every day and has not had sick leave or unforeseen events.

In June, the calculation is made by dividing the amount of extra pay by the total number of days worked, and dividing the result by the days of the year.

Let’s see an example of calculating bonus payments in June and December 2023:

In the event of not having suffered any leave or other type of unforeseen event, the calculation method would be to count the number of business days elapsed until then. In this way, the formula to follow is: Amount of the extra pay x Number of days elapsed / Total annual number:

In this way, for the June bonus we would count 180 days worked, so the formula to calculate the amount would be: 2,000 x 180 / 360*18 = 1,000e.

Once we carry out the calculation method for December 2023, we must count 360 days worked, so the formula to follow would be: 2,000 x 360 / 360 = 2,000e.

The two bonuses we’ve talked about so far refer to bonuses that are required by law. They are, therefore, a minimum, since it is possible that there are collective agreements that recognize some extra pay.

Taking into account the disappointment among the majority of Spanish workers with their salary, we would have to ask ourselves: are they enough to keep the workforce motivated and encouraged?

The answer seems clear: No. For this reason, companies, with their leaders in Human Resources at the helm, have been betting in recent years on investing in a policy of extraordinary payments that promotes a transparent compensation system among their workers.

The objectives: retain talent, attract qualified workers, improve the work environment and increase its economic results. 

This new way of managing company resources implies an evolution in people management, going from a traditional model to a more modern one in which opacity is avoided, salary policies aligned with performance are encouraged, and fair criteria are followed. and transparent.

A change that Factorial is part of by optimizing Human Resources processes so that companies make better decisions.

Types Of Extraordinary Bonuses And Compensation

Disillusionment with employee salaries, together with the competition that exists between the most innovative and leading companies in attracting the best talent , have led to the emergence, and consolidation, of extraordinary bonuses aimed at motivating and that go beyond the two annual extra payments.

These gratifications are based on recognition, the work itself, responsibility and the development expectations of the employee himself. Among them we find:

Social Benefits

These compensations refer to all those goods or services that the company offers its employees as a complement to their salary. Within this category we would find insurance, diets, granting loans, training or leisure activities (gym, yoga, Pilates…).

They affect the motivation and satisfaction of workers. Companies, in turn, also obtain advantages: they are exempt from personal income tax (according to the limits of the corresponding law); they contribute to Social Security and are 100% deductible from Corporate Tax.

Variable Remuneration Systems

Here we are talking about the incentives (this time in the form of money) that the employee receives when they meet certain predefined conditions: productivity, sales, performance…

With these incentives, the company wants to stimulate the interest of workers to achieve better results and reinforce certain behaviors to achieve the objectives of the company.

The Emotional Salary

This point refers to less tangible aspects than salary, such as professional development, the company’s mission and values, its image, the lifestyle it can provide or relationships. The emotional salary generates, above all, psychological well-being, conciliation and opportunities for self-development.

Company Stock Programs

The offer to buy shares at a discount, usually with preferential financing, can be an incentive for key employees in large companies. These purchase options are non-transferable and designed as a long-term variable remuneration mechanism and withholding, also taking advantage of some tax advantages

Participation In The Results

This type of compensation tries to make the employee participate in the company’s results, get involved in the management, and in the feeling of pride when the company is doing well, or challenge when it goes badly. This policy does not compensate for work done.

As we have seen, companies can establish different extraordinary bonuses, which means that each employee can have different supplements .

For this reason, it is essential that Human Resources departments have digitized payroll management software that allows them to update this data without errors and save time updating and managing information that affects the worker’s salary .

With Factorial we can update data automatically, schedule the supplements per employee, decide if the compensations are fixed or variable.

Benefits Of Implementing a Policy Of Extraordinary Payments

Compensation systems are a basic pillar today in the Human Resources strategy of a company.

In an environment in which human talent is increasingly scarce, offering employees a pleasant and transparent environment in which they can develop professionally is vital when it comes to increasing employee motivation and avoiding the much-feared employee turnover. . 

Some of the advantages of betting on a compensation plan are:

  • Increased Motivation

It is an effective way to motivate employees to do their best, as they feel valued and recognized for their performance.

  • Talent Retention

It helps to retain employees in the company, since it provides them with additional compensation for a job well done and for the achievement of previously established objectives.

  • Productivity

When employees feel valued and recognized, their level of productivity increases, which can have a positive impact on the company.

  • Improvement Of The Work Environment

A good (and transparent) compensation policy makes workers feel more satisfied and committed to their work and to the company.

  • Business Image

Offering extraordinary payments improves the image of the company before the public opinion and customers, which can have a positive impact on sales and the profitability of the company.

How To Implement a Policy Of Extraordinary Payments

Now that we know the advantages of recognizing a job well done by our workers, what are the keys that we must take into account when developing a correct bonus plan ? 

The first point that we must be clear about is that compensation models must be integrated into the company’s strategy, its culture, as well as its economic and social environment.

Any compensation or extraordinary pay plan must take into account the salary budget and be sure that you will be able to assume all the commitments acquired. 

Hence, planning is essential to avoid financial problems . With it, those responsible for Human Resources guarantee that the amount of money allocated to these payments is included in the company’s budget.

Professional Classification And Transparency

This, however, can only be done correctly if we establish a professional classification of all staff (professional families, levels and functional), a remuneration model and classification of jobs, we frame the salary ranges by level and, to establish the payments extraordinary.

We carry out an equity analysis both internally (within the company) and externally (what other companies in the sector do) to establish the most appropriate salary review, level change and variable remuneration policies.

According to the study, the simple fact that the workforce knows how the payment systems work and how the individual compensation packages are set has a positive impact on the attitude of the employees.

Some of the results obtained after taking this step among the companies analyzed in the report were: promoting labor commitment, talent retention, and the willingness of the workers themselves to recommend the organization to friends and family.

Basically, what the study says is that companies must flee from the obscurantism that has historically surrounded salaries by establishing equitable and public salary ranges and bands, as well as a clear compensation system.

This would allow workers to know at all times what their development options are, both professional and economic, and to really feel part of the business.

At this point, communication channels are essential to reach the employee , so it is necessary to use a wide variety, ranging from the personal to the most technological.

Hence, companies have the appropriate tools provided by technology, such as Factorial, to be able to manage all this information, optimize processes and make better decisions.

Managing your company’s payroll is a key task to comply with all current legal requirements and, in this way, avoid fines, sanctions and any other type of inconvenience with workers and suppliers.


Investing in an extraordinary pay policy has many potential benefits, including attracting and retaining the right talent, increasing employee satisfaction, improving employee productivity and performance, and increasing overall organizational success. Contact us for more content like this.

Frequently Asked Questions About Keys And Benefits Of Investing In An Extraordinary Pay Policy

Lifestyle Spending Account (LSA).
New Parent Support.
Matching Charitable Contributions.

Benefits at work.
Health benefits.
Financial benefits.
Lifestyle benefits

Increased employee performance.
Higher levels of job satisfaction, staff engagement and team morale.
Better workplace culture.

Employees are given three weeks of paid leave, which is increased to four weeks after five years of service. Sick days are also included, with full salary compensation. However, beyond 14 days of leave, 50% of salary is deducted.

Businesses invest their money for a variety of reasons. Some make investments to generate additional income, while others focus on protecting and increasing the value of their existing assets.

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Chris Charles
By Chris Charles

Hey everyone, I am Chris, A versatile and knowledgeable skills writer, able to bring a fresh perspective and valuable insights to a wide range of topics, from public speaking to time management. An experienced skills writer with a talent for breaking down complex concepts into easily digestible content that helps individuals succeed.