One key to attracting and retaining the best employees is to come up with an awesome compensation strategy that benefits everyone involved. Developing a plan that reflects your business's values is an essential step to making your organization become the best it can be. Follow these steps to develop a better strategy for your company:
1. Do your homework.
There’s a wealth of information available online regarding pay rates for specific positions. Search through the many online databases that offer information about salary norms to familiarize yourself with common rates and how employees feel about their rates. One great tool? Fairygodboss's salary database. Knowing what other companies offer can help you establish a good sense of what an appropriate starting salary for each level is, allowing you to impress candidates immediately from the offer phone call.
2. Develop a rubric.
Your company's values should help guide how much each employee is paid. Coming up with a specific structure that determines what salary each team member earns is crucial to developing a fair, consistent compensation strategy. Factors to consider include experience, effort, and level of responsibility. You can determine which factors matter most in specific roles. For instance, you may decide that a senior sales position should most greatly be decided by how many years of experience they have, but an administrative assistant position might factor in level of effort more than experience. Creating a rubric and sharing it within your organization means that you have a framework you may use to explain salaries to employees.
3. Decide where you’re willing to spend.
Building a compensation strategy should be a collaborative effort that is not rushed. After reviewing data collected and establishing a rubric, determine what areas you are willing to pay above market value for and where you are not. For instance, you might decide that your company is in strong need of a certain position, so you would be willing to pay more than the average salary to procure talent in this area. Meanwhile, you may choose to agree not to pay salaries that go above market rate for other positions that are less essential.
4. Design your benefits strategy to align with company values.
While it’s important to make sure that you are paying your employees salaries that align with your values, it’s also important to make sure that the benefits and perks you give your employees do as well. If you claim to have a commitment to keeping employees connected with their families, offering nap pods so that employees can rest at work and avoid going home would not match up with the value. A better perk to offer would be giving employees flexible work days and personal days that they may use to spend with their families.
5. Be open to adapting.
As the market changes and demands for certain skill sets increase and decrease, adjust your compensation rates. Some skills may become more valuable than others, and that means that you’ll need to decide on how to change your rubrics and framework. If the market shifts or the number of people searching for a particular position rises or falls, let these patterns inform the shift in levels of compensation offered within your organization.
6. Base promotions on outcomes.
This practice helps encourage employees to do their best work. Some businesses only reward employees who have favorable outcomes with more work but no additional compensation, which can decrease levels of employee satisfaction. Having a strategy in place that rewards employees who meet and surpass performance targets encourages all employees to strive to be the best and help the company thrive. Rewarding hard work encourages employees to help the company and stay on track. This practice helps keep employees from becoming disgruntled and either slacking off or leaving to find a position someplace where hard work is rewarded.
Kayla Heisler is an essayist and Pushcart Prize-nominated poet. She is an MFA candidate at Columbia University, and her work appears in New York's Best Emerging Poets 2017 anthology.