Employee compensation is one of the biggest expenses of companies, but too many companies lack sufficient knowledge as to how to effectively manage it. Yet these same companies regularly examine & seek to adopt (or adapt) best practices when it comes to other business functions—Procurement, Production, Customer/Client Services & others.
This article provides two examples of best pay practices:
#1: Provide Pay Transparency
- This does NOT mean revealing to employees everyone else’s pay.
- It does mean providing all employees with an understanding of the bases or philosophy upon which your company establishes employee pay.
- Here is a sample pay philosophy:
ABC Company goal in employee compensation is for it to be:
Competitive with the market place for like positions
Fair in comparison to other ABC employees in the same or comparable role
Tied to individual performance
#2: Embrace Incentive Compensation
- Long gone are the days when incentive compensation applied only to those in management, executive & sales roles.
- Top performing companies have adopted incentive compensation for most, if not all, roles.
Obviously, there are marked differences in the amount of & basis for incentive rewards depending upon the individual role. Nonetheless, it creates a culture “we’re all in this together & when we’re successful we all share in the fruits of that success”.
EMPLOYER ACTION
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Ask yourself these questions:
1. How effective is our compensation in achieving its objectives of:
- Attracting high level talent & in sufficient numbers
- Motivating employees to work to their optimal individual performance level & collaboratively
- Causing employees to remain with the company
2. When is the last time you did a comprehensive analysis of what pay in comparison to the marketplace for comparable positions?
HOW TRINITY CAN HELP?
Trinity’s Team of Consultants have extensive experience in helping organizations to create highly effective compensation programs.
- For more information, e mail Trinity at info@TrinityHR.net or visit our website at www.TrinityHR.net.
“You have HR challenges…Trinity has solutions!