Developing a formal compensation communications program provides employees with an understanding of why pay decisions are made.
Only 36% of employers have a formal compensation communications program, according to an HRsoft poll. However, this is something all organizations should have, because a compensation plan is only effective when the workforce understands it.
Performance Impacts Pay
In our previous posts, we covered compensation principles that help ensure your company’s pay strategies produce the results required and shared an example you compensation policy statement. Here we discuss the vital connection between pay and performance.
The overarching goal of the compensation strategy is to ensure an organization has allocated the money necessary to motivate the performance needed to achieve the business strategy. To that end, compensation should also tie into the overall performance management strategy.
In our previous post, we covered compensation principles that help ensure your company’s pay strategies produce the results required. This example can help you write a compensation policy statement for your organization.
According to an HRsoft poll, 60% of organizations have a written compensation policy statement. For those who do not, reviewing examples may provide inspiration for developing a compensation philosophy that reflects a company’s business goals and corporate culture. Here is one sample of a compensation philosophy to review:
In Part 2 of our multi-part blog series, we talk about the compensation principles that are foundational to ensuring your pay strategies produce the results required.
Striking a balance with core compensation principles
For the majority of organizations, core compensation principles should strike a balance between paying in a way that is externally competitive and internally fair. Yet, there are many different interpretations of what is fair. For this reason, it is critical to achieve clarity and agreement among key stakeholders on how the company should pay its people. This will ultimately inform your rewards philosophy.
In this 5-part blog series, we’ll discuss how to build a compensation strategy for your company that balances company goals and industry shifts, supports business strategy, and ensures pay transparency.
Fair Pay for Employee Contributions
Oftentimes when managers discuss pay with their employees, they encounter questions for which they may not have an answer. Employees want to know they are receiving fair pay for their contributions, and may wonder...
Engaging a compensation consulting firm to perform a compensation analysis project can be intimidating. It's a little bit like being an 18-year-old and the first in your family to apply to an Ivy League school. What if you actually get in? There will be times when you're uncomfortable and challenged but, ultimately, you're going to get a great education and be in a position to succeed.
In a previous post, we talked about using SMART objectives for compensation consulting projects and the importance of Key Performance Indicators, or KPIs.
After your customers, your employees are the life blood of your business. Maintaining good morale and loyalty is essential to retaining them – and avoiding the costs associated with replacing employees who leave.
We've found that business owners - especially those in middle market companies - are often surprised by how much it costs to replace an employee.
According to Zane Benefits, a CAP study found average costs to replace an employee are: