A compensation plan must include a fair salary and benefits at least up to industry standard; however, small business owners who think salary and benefits are all that go into a compensation plan may be shorting themselves by missing out on some key work motivating factors. In fact, creating a well-crafted compensation plan should be given the same level of thought and completeness as capital planning, product development, and pricing. Instead of constructing a compensation plan piecemeal, companies should take a strategic approach to drive the goals of the business, rather than simply satisfying employees.
A superior compensation plan can make the difference when it comes to hiring top candidates. With this in mind, it is important to remember that compensation is not solely monetary. Consider the following points when developing your organization’s strategic compensation plan:
- Give them the tools. Think about work challenge and autonomy when developing your compensation plan. Include trainings to help your employees advance in their careers and your organization, as well as flexible options for a reasonable work-life balance. These types of benefits motivate employees and should be conveyed to applicants as part of the compensation package.
- Look at your competition. Who are your prime competitors? Examine their compensation packages against your own. Think about what you can offer that they can’t, and determine which areas you need to improve to meet their challenge. This is a great point for attracting top talent to your company instead of a competitor.
- Show recognition. By nature, human beings are emotionally driven and respond positively to recognition, praise, and expressions of gratitude. Simple actions such as sending a thank you email for a job well done, or reserving a special parking spot for Employee of the Month are also part of a well designed compensation plan. Although they won’t cost you a thing, forms of recognition are the greatest motivating factors for employees.
Although salary and benefits are key components to any compensation plan, they are not the only factors to consider. Senior managers who neglect to see the big picture when crafting a compensation plan are missing out by ignoring key points that motivate work. If you are looking for assistance in developing your company’s compensation plan, contact the experts at Springborn Staffing today!