Designing a Compensation Plan Helps with Employee Retention
A competitive compensation plan is a critical part of employee retention efforts. You need to ensure that the plan you offer is enough to attract quality job candidates and keep those employees with the company for the long term. A competitive compensation plan is a critical part of employee retention efforts. You need to ensure that the plan you offer is enough to attract quality job candidates and keep those employees with the company for the long term. If your employees feel that they are essential to you and take care of them, they will do whatever you ask.
Employees are, without a doubt, a company’s most expensive asset. Paying too much can be very costly. However, paying too little can result in turnover, low productivity, and low employee morale.
We help establish a pay system to set fair base pay and incentive amounts. Based on business strategy, we help align pay practices to drive desired behaviors and business results. We further help create the perception of internal and external fairness needed to attract and retain the right people.
- Suggest Salary range guidelines to set base amounts and to control and manage labor costs.
- Implement Procedures to set new-hire pay, promotions, equity adjustments, and pay increases.
- Introduce Pay methods that make sense and drive desired results and behavior.
- Review Salary survey data comparison (survey data may cost extra). Incentive and bonus plan design.
- Alignment of other rewards and reinforcement practices.
- Identification of equity concerns and possible pay discrimination practices.
- Establish base pay guidelines that make sense, are competitive with the market, attract good people, and help control costs.
- Use the right kind of payment methods to drive desired results and behaviors. Create incentive and bonus pay plans that help drive business strategy.
- Promotion and pay increase guidelines.
- Evaluate, so you can change or grow as required. Be ready to make modifications to your compensation plan. Adjustments will be necessary for you to remain legally compliant and competitive.
According to Leigh Branham, CEO of Keeping the People, notes that 89 percent of managers believe people leave their jobs due to compensation, but 88 percent of employees actually leave for other reasons. Branham says the seven hidden reasons are: the job not being as expected, people not being a good fit for the job, too little support or feedback, little opportunity for growth, feeling unappreciated, stress and overwork, and loss of confidence in management. Resolving these common problems can keep employees satisfied in their jobs so they are more likely to stay.