Applying the 3P Payroll System: A Foundation for Sustainable Growth
30/09/2025
In today’s highly competitive labor market and rapidly growing globalization, payroll is no longer just a basic HR function—it has become a strategic tool for optimizing costs and enhancing productivity. One method increasingly adopted by both Vietnamese and international companies is the 3P Pay System—based on Position (Job Role), Person (Individual Competence), and Performance (Work Results). This article analyzes how the 3P system can be applied to payroll, why businesses should implement it, and how to combine it with payroll services or payroll outsourcing for maximum efficiency.
1. Current Challenges in Payroll Management
Many Vietnamese companies, especially SMEs, still use traditional pay systems based on seniority or fixed salaries. This creates multiple issues:
1.1. Internal Inequality
When employees in the same role receive different pay, or when high performers aren’t properly rewarded, it often leads to conflict and high turnover.
1.2. Uncontrolled HR Costs
Without a scientific framework, salary budgets can easily overshoot—especially during hiring peaks or when retaining top executives.
1.3. Difficulty Attracting and Retaining Talent
A VietnamWorks 2025 survey found that 73% of employees consider transparent pay policies as the deciding factor for long-term commitment. Without a clear system, companies lose their edge against headhunters.
1.4. Errors in Payroll Processing
Manual calculations or Excel-based payroll often lead to mistakes in social insurance and personal income tax, resulting in legal risks and employee distrust.
=> Solution: Adopt the 3P system combined with professional payroll services to ensure transparency and optimize HR management.
2. Overview of the 3P Pay System
The 3P model is a modern HR approach successfully applied by global giants like Toyota, Unilever, and Samsung. Its main goal is fair, transparent pay that rewards performance.
2.1. The 3 Core Elements
| Factor | Meaning | Objective |
| P1 – Position | Job evaluation based on complexity, responsibility, and contribution | Fair pay based on job value |
| P2 – Person | Skills, knowledge, and experience of the employee | Encourage competence development |
| P3 – Performance | Measured by KPIs, OKRs, or goals | Reward achievements and drive results |
2.2. Benefits of the 3P Pay System
- Fair & Transparent: Eliminates subjective pay decisions.
- Optimized Salary Budget: Data-driven HR cost planning.
- Talent Retention: Employees see clear evaluation criteria and career paths.
- Supports Recruitment: Transparent policies attract top candidates.
- Legal Compliance: Fewer errors in salary, insurance, and taxes.
3. Applying the 3P Pay System in Payroll
To be effective, 3P must be integrated into monthly payroll processes:
Step 1: Build Pay Structure (P1)
- Job analysis & valuation.
- Salary ranges per job grade.
- Sales Staff: VND 10–15M
- Sales Team Lead: VND 18–25M
- Sales Director: VND 35–50M
- Sales Staff: VND 10–15M
Step 2: Assess Competencies (P2)
- Create a Competency Framework.
- Update regularly for new job demands.
- Link salary increases to skill growth, not just seniority.
Step 3: Integrate Performance (P3)
- Use KPIs/OKRs for measurement.
- Apply flexible bonuses (quarterly, project-based, over-target).
Step 4: Automate Payroll with Technology
- Use emolument software or outsource.
- Ensure accuracy in tax, insurance, and benefits.
- Minimize data security risks.
4. Payroll Services – Optimizing the 3P System
Not every company has the resources to fully run 3P internally. Payroll outsourcing is a preferred solution, especially for companies with 50–500 employees.
Benefits of Payroll Services:
- Expertise: Professionals updated on tax & labor law.
- Cost-Saving: Reduce HR hiring & training costs.
- Data Security: Safe, confidential payroll records.
- Compliance: Prevent legal risks and penalties.
NIC Global – Trusted Payroll Partner
NIC Global provides end-to-end emolument solutions:
- Consulting & implementing tailored 3P systems.
- Automating emolument processes with high accuracy.
- Updating labor, insurance, and tax regulations.
- Transparent reporting for management decisions.
Roadmap for Implementing 3P
| Phase | Key Activities | Timeline |
| 1 | Job analysis & evaluation | 1–2 months |
| 2 | Competency framework & KPIs | 1 month |
| 3 | Internal training & pilot | 2 months |
| 4 | Payroll automation & regular reviews | Ongoing |
Conclusion
Applying the 3P Pay System to payroll brings fairness, transparency, and efficiency—building a foundation for sustainable growth. When combined with professional payroll outsourcing services, businesses can optimize costs, minimize errors, and increase employee satisfaction.
In today’s competitive environment, fair and transparent pay is the key to retaining talent and driving business success. Investing in the 3P system is not just an HR upgrade, but a strategic move for long-term growth.
For contact and support:
Facebook: NIC Global – Human Resource Solutions
LinkedIn: NIC Global Sourcing JSC
Website: www.nicvn.com
Email: info@nicvn.com
Hotline: (+84) 981.23.43.76
Address:
- Hanoi Office: No. 3A Thi Sach, Hai Ba Trung Ward, Hanoi, Vietnam
- Ho Chi Minh City Office: Dakao Center Building, 35 Mac Dinh Chi, Sai Gon Ward, Ho Chi Minh City, Vietnam
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