Why You Need a Compensation Strategy
If you own a company, you need to put some thought into your compensation strategy. There are many factors that make people want to work for you but if your compensation factors are not clean, fair, and motivating, then you are fighting an uphill battle.
If you don’t have a compensation strategy you are at risk of not attracting new talent or keeping your employees. Your plan needs to make financial sense and help achieve your organizational goals.
Without a compensation strategy employee offers, raises, and bonuses, get decided on an individual basis versus a strategic process. You run the risk of inequality and hurting your business–staff may see inequality and an unclear compensation path. This can even happen when you are paying your employees above the market rates. Be clear, fair, and consistent.
Putting Together a Strategy
When putting together a strategy you need to start with your goals. Do you want to pay your employee above, below, or at par with market rates?
Now you need to research your industry on what motivates your current and future employees. Figure out where you stand and where you want to go.
You also need to focus on how to handle salary increases. Are they based on individual performance and/or company performance? You need those guidelines in place and your employees need to understand them. The clearer the strategy is to your employees the more it will be viewed as unbiased and fair.
Lastly your benefits need to be considered. Vacation, health, retirement, perks, etc. They need consideration and are part of your overall compensation package. Employees want more than just a pay cheque. Set a strategy and budget that will motivate your employees and help support your company goals.
Give People Stuff a call, and we can help setup a strategy that will speak to your employees and support your goals. In the end you will retain more employees and attract new talent.
People Stuff is located in St. John’s, Newfoundland, (709) 697-2423 or chad@peoplestuffnl.ca
