3 Tips For Providing Appropriate Compensation To Employees

The compensation you offer can make it easier or harder to find the best talent for your business. Before you hire for a specific position in your business, you need to consider how your compensation package will attract and retain the right people for the job.

Know Your Competition

Developing an appropriate compensation package is not only a matter of what you think the job is worth, but how much similar positions are paying at other companies, the current job climate, and your locality. Without paying attention to these different factors, you cannot reasonably expect to hire the best talent for the job. If possible, look at job openings at similar businesses to see if they list the compensation for the position. Many salaried positions do not list the compensation, so you might have to start with the average pay, which is often available from the Bureau of Labor and Statistics. You will also need to consider other components of compensation, such as paid leave or other employee benefits, which can make a lower salary more attractive.

Consider Incentives

Having the right compensation will generally attract applicants with more experience and education, but it does not always translate into high levels of performance. Whenever possible, you should find ways to incentivize good performance, preferably with money. Many positions that involve finding new business clients or increasing sales are often rewarded with year-end bonuses if the employee helps increase sales. Other ways you can offer bonuses are if you have stand-out employees who have good patient care, positive reviews, or improve the overall work climate. Find ways to incentivize different aspects of an employee's job, not just those who earn the business more money.

Reward Hourly Employees

Hourly employees are often an afterthought when it comes to incentives. There are some types of businesses that see significant ebbs and flows in day-to-day tasks that are not necessarily reflected in the pay employees receive. For example, you might have a large business that ships many products each day. Employees will likely have a base hourly wage, but if you are not willing to increase their compensation during know periods of increase demand, you might face problems retaining employees or having them work at their best.

Consider working with a consultant to determine the best way to increase compensation during the high-demand periods to help motivate current employees. You might set a goal of having all packages shipped within 24 hours during the peak holiday season. Those employees who are willing to commit, even if it means working extra hours might receive a special bonus on top of their usual hourly pay. Instead of simply hiring temporary workers during the holiday peak, you might reduce the number of new hires if more of your current employees are willing to work for guaranteed overtime pay or performance bonuses.

Compensation is one of the most important factors in finding new employees or retaining the ones you have. Investing more effort and appropriately compensating your employees might pay for itself by having better employees that perform at their best.