This column is authored by Tony Trikha, Benefits Administrator, TeemWurk
It’s not surprising that staff compensation strategy is what makes an organization stand out among the competition. According to a research, there is a strong correlation between financial performance, employee compensations and goal setting process of a company. But, inducing employee preferences and aligning compensation without breaking the bank is one of the greatest challenges for HR professionals.
HR leaders need to employ a data-driven approach that transforms the business into one that’s focused on reaching goals with well-managed staff compensation plan. Thus, customized and strategic compensation alignment is must for the feasibility of business success and better recruitment, retention and employee satisfaction rate.
Here are a few tips for HR pros make employee-friendly compensation strategies:
1. Effective Communication
Organizations need to understand financial and benefit requirements of their employees through effective communication. Based upon that, compensation strategy should be planned that reflects employee needs. HR professionals must ensure employee-centric compensation strategy by periodically communicating with employees. One-to-one communication and regular feedback from employees can help employers to align compensation strategy with business goals.
2. Review Your Current Compensation Plan:
Analyze compensation offerings and determine if you are rewarding your employees sufficiently for their efforts. Use market salary data to define your compensation structure. For example: IT professionals and project managers should be paid according to market rates as productivity of these professionals increase with time and their sudden turnover can cost you big.
3. Couple Other Benefits Perks for Employees:
Apart from salary perks, look for other options for employees like incentives, consulting contracts, employee stock options and individual rewards. Thus, creating a benefit pool will encourage top performers to contribute more to company goals as well as boost up morale of slow performers to become more proactive to bring in overall company growth.
4. Align Organizational Milestones along with Employee Compensation Goals:
Employers can assign individual goals to employees and can strategize compensation offerings based upon individual’s capability to meet those individual goals. Such compensation offering will motivate employees to perform their best to achieve short term goals (as this will decide their appraisals). This will also bring company vision, employee vision and compensation policies in sync. Thus, significant relation between rewards and goal recognition leads to exponential increase in company’s success.
Employee compensation is a critical component in strategic organizational planning and retaining top talent in the organization. Thus, it is very important to effectively align compensation policies with employee needs and company’s goals.