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How can employer and employee adjust salary to the market value (Bosnia and Herzegovina)

An employee’s salary is usually agreed on and specified in the labour contract. However, economic and social situations are constantly changing. Therefore, salaries are usually adjusted on a yearly basis.

Country

Bosnia and Herzegovina

What challenges does it focus on?

Establishing a reasonable salary adjustment in line with the market value in Bosnia and Herzegovina.

Short summary

When an employee is hired by his or her employer, they enter into a labour agreement. This agreement contains all main conditions of their cooperation, including the amount of the employee salary. However, since the economy is developing constantly, salaries are regularly adjusted to issues like inflation. Therefore, the parties may agree on:

  • adjustment of the salary with the same percentage as inflation
  • concrete amount the salary should be raised (or declined) to; or
  • special tools, mechanisms or indicators on the basis of which the calculation should be made.

Annual salary increment also depends on particular profession:

Profession Salary increment (%)
Executives 3.5
Managers 4.0
Professional (sales) 4.0
Porfessional (non sales) 3.5
White collar workers 3.8
Blue collar workers 3.5

Research evidence

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