02 Nov 5 Must-Have Components of a Compensation Management System
A solid compensation management system should go beyond just checking the boxes by paying people fairly. When executed properly, it can also support key business goals. By optimizing your approach to compensation, you can go beyond pay and spur continuous improvement across your organization. Here are a few must-have components for any effective compensation management framework:
1 External Competitiveness
Factors like work/life balance and learning opportunities have become increasingly important to employees in recent years. Yet, if you’re not paying in line with or above market value, you’ll risk losing out on top talent. Surveys like the one featured here on TLNT.com consistently reveal that salary continues to be a top priority among the majority of workers.
2 Engagement-Boosting Factors
Gallup reports that a whopping 87% of employees are not engaged at work across the globe. Today’s workforce expects employers to provide engagement-boosting offerings, such as career development training and continuing education opportunities.
3 Regulatory Compliance
It goes without saying that your approach to compensation must align with labor laws .Yet, because updates to regulations like the Fair Labor Standards Act are made frequently, it’s essential to make sure your practices are consistently revised to align with changes as they occur.
4 Talent-Attracting Qualities
Effective compensation management should not only help to retain top performers; it should also help your company attract in-demand talent. Identify which positions are most sought-after in your industry – and which play the most significant roles in helping your organization meet its goals – and pinpoint which compensation factors can be used to attract these candidates.
5 Retention-Supporting Elements
Lastly, your leading performers should feel that they’re being compensated fairly for the quality of work they deliver consistently, as well as their commitment. If your most dedicated employees don’t understand the unique value of employment your organization offers, along with the awards offered exclusively to standout performers, they’ll be more inclined to seek work elsewhere.
HRsoft is the trusted global leader in compensation management software whose COMPview solution is proven to control and simplify the full process and allocation of merit, bonus and equity awards to drive manager and employee engagement.