15 Dec How to Identify Your Top Performers to Create an Engagement-Boosting Compensation Plan
Your company’s talent is its best asset, so keeping them engaged is critical to your bottom-line results. While there are many strategies that work to drive employee engagement, the fact is that compensation is extremely valuable for showing employees that they’re appreciated, which keeps them engaged and motivated.
This is especially important for your top talent. Focusing your comp planning strategy on your highest-performing employees will yield better, faster retention and productivity results. In fact, a recent Personnel Psychology study revealed that a high performer can deliver 400% more productivity than an average performer. Here are some ways you can identify these valuable contributors in your organization:
Ask These Questions
The first few questions we need to ask ourselves are:
“Who are we trying to target?”
“How do we identify our top performers and critical talent?”
“How are they currently being compensated?”
What may appear to be simple questions on the surface can help identify not only the employees you want to focus on, but potential gaps in your compensation strategy as well. The last thing we want to do is to create a generic compensation plan that does not target the right people because we do not understand their contribution to the company or because we do not understand their existing pay structure. Answering these basic questions will help us begin to shape our compensation strategy around our top performers.
Identifying Your Top Talent To Target
To start, you will need good tools, information and metrics to accurately identify top performers. Here are a few options to consider:
Performance Management – You likely have some sort of performance review process in place, so this is an easy place to start. Effective performance management is more than just an annual review of performance and goals, but an ongoing process through which goals are set, measured and assessed with a continuous feedback loop in place to assess the progress against the objectives set. This approach prevents the company from managing performance based on “gut feel,” which is important when you want to be fair and transparent, especially to your top performers.
Hiring & Line Managers – Don’t forget to tap into your resources on the front lines. Your hiring managers have worked tirelessly to attract your top talent, so they often know more about what brought them to your company (and what might keep them) than anyone early on. And the line managers have insight from their day to day interaction with the employees. Their feedback provides a valuable and important balance to the process.
Succession Planning – If your organization has a succession planning program in place, this is a great way to identify high performing, experienced employees that are ready to take on expanded roles.
Calculating the Right Compensation
Before you decide on a compensation strategy for this group of employees, you need to first understand how they are being paid. Compensation can be driven by a number of factors including performance, market data or corporate policy.
If you have not had a formal compensation strategy in place, it will be helpful to understand how your top performers are currently being paid and create a consistent process to compensation them going forward.
While identifying top talent is an important first step of a designing a comp plan that will improve employee engagement, it is only one part of the equation. You can visit the HRsoft blog to discover more strategies for driving engagement through compensation, and you can also check out a brief demo and product overview of COMPview, the HRsoft solution to aligning and simplifying compensation planning for fast-paced organizations.