Is your business evolving? Perhaps you’re adding employees or promoting staff. Or perhaps you’re facing economic challenges of pressure from local competitors. It may be time to adjust your compensation strategy.
There are a few things to consider when making changes to your compensation strategy. First, you need to be sure your company’s compensation is aligned with industry and regional norms. The U.S. Department of Labor and Bureau of Labor Statistics have a wealth of comparable data on their web sites (dol.gov and stats.bls.gov, respectively). If you’re having trouble determining the appropriate compensation you may want to consider contacting a professional recruiting firm. Remember, workers have little incentive to remain with an employer so it’s important you are aware of the going rates for the various positions you have on your staff.
Once you have determined the appropriate salary for each position, it is important to group together jobs of similar value. Employees need to feel that they are being paid fairly in terms of the value of their work compared to colleagues with similar responsibilities.
Once you’ve grouped these positions together it is important to develop salary ranges which consist of a minimum, which applies to less experienced staff, a maximum, for your premium employees and industry veterans, and a midpoint (or control point).
These are just a few concepts involved with establishing a strong compensation strategy. Contact our team if you have additional questions.