16 Dec How to Factor In Your Critical Talent when Building a Competitive Compensation Plan
After you’ve identified the strategy for your compensation plan that best meets your organization’s goals and company culture, the next step is to begin identifying your top performers. This is a critical step, because your top performers are the backbone of your company and are most likely to help you continue achieving aggressive results. Below, I’ve collected some tips for identifying your organization’s top performers.
According to Dr. John Sullivan, top performers:
– Achieve 10 times more than an average worker, yet require less than two times the pay
– Drive the face of innovation within the company
– Are great role models and mentors and have a positive effect on the productivity of average employees
According to a study by Monster, high performers on average may contribute $60,000 more to the company annually than their counterparts. So, when building a more competitive comp plan, it’s not just about attracting these high performers, it is about identifying the ones you have and retaining them.
Here are some additional factors to consider when identifying top performers:
- Who are our most critical talent on an ongoing basis?
- Who possess unique skills that are hard to come by?
- Who takes the most initiative on independent projects?
- Who consistently completes deliverables on time and on budget?
- Who has the most impressive performance review scores?
- Who amongst the star employees are at-risk for turnover?
Once you’ve answered these questions, the next step is to look into how top performers are paid and the reasons behind the existing pay structure. This deeper dive:
– Exposes the top performers you should be focusing on
– Exposes any gaps in your compensation strategy so that you can revise your approach
Keep in mind that the responsibility of identifying your organization’s best performers can be shared among multiple contributors – it shouldn’t fall solely on one individual alone. Here are some effective tactics you can use for getting multiple people on board with efforts for identifying top performers:
Hiring & Line Managers – Hiring and line managers offer probably the most well-informed opinions when it comes to identifying top talent. Because of their day-to-day interaction, they are well aware of the strengths, weaknesses, and intrinsic value of the employees on their team (or employees who were recently recruited, in the case of a hiring manager). Their insights are invaluable and can help you better allocate compensation resources where they can produce the best results.
Performance Management (PM) – Performance management is another avenue that yields reliable data to identify key employees. You likely have some sort of performance review process in place that you can leverage as a valuable resource. True performance management is a continued process through which objectives are established, progress is assessed, and feedback with ongoing coaching is provided to make sure the employees are meeting their career goals and objectives. An effective PM program will help organizations clearly and consistently identify critical talent aligned with its goals.
Succession Planning – Ted Bauer says that only 37% of companies have some sort of succession plan in place. Is your organization included in that figure? Succession planning is directly tied to both core and leadership skills. Since it is a roadmap to nurture talent that can take on expanded roles, it is a great tool to spot performers who outpace the rest and have been tagged as future influencers.
Stay Interviews – Although a relatively new concept, the underlying premise is as old as management itself. Stay interviews are structured conversations between a leader and their direct reports designed to uncover actionable items to increase retention. Stay interviews not only can help identify your top performers but also those that are at risk of turnover.
If you’re not currently practicing stay interviews or performance management as described above, HRsoft has solutions that can work with your company’s existing process to help you identify and retain your best talent. You can learn more about our effective solutions here.