06 Jun 3 Tips to Manage Employee Compensation Successfully in 2019
If one of your primary duties is to manage employee compensation, you already know that there are considerations when it comes to paying people fairly. Not only must you satisfy internal requirements to align with your organization’s available talent spend, but there are external pressures largely dictated by market fluctuations which must be accounted for as well. While you won’t be able to control most of these elements, what you can control is how you manage them. Discover some key tactics for managing employee compensation with success in the modern workplace below.
1 Use Compensation to Attract the Talent You Need
Compensation can be used as a tool to motivate and retain top performers, but it’s also a powerful agent for attracting in-demand talent. In today’s competitive job market, it’s wise to look at the most difficult-to-fill positions, including those requiring specialized skills, and refining your salary or reward offerings for these positions as needed.
2 Pay for Performance
Pay for performance has become an increasingly embraced means of rewarding and motivating employees for their contributions. When administered effectively, it can pay off. Yet, when linking employees’ pay to their performance, there are a few critical factors to keep in mind. For one, there must be ongoing clarity between the employee and their manager around performance expectations, progress towards goals (both outcomes and progress should be measurable), and how the employee’s contributions connect to the greater organizational mission.
3 Embrace Pay Transparency
Employees may be largely satisfied with their pay – until they find out someone in a similar position is makes more. Nowadays, the availability of self-reported employee pay data through sites like PayScale.com has made it easy for employees to find out what their coworkers are making. The business landscape as a whole is moving towards a place of pay transparency, especially considering socio-political concerns such as the gender pay gap.
Establishing a compensation philosophy in which transparency is embraced could help you navigate these new challenges. Just be sure your managers are prepared to answer any questions about pay data with thoughtful, informed responses, and that you have defensible criteria in place on which pay decisions are made.
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.