Design a Competitive Compensation Plan to Retain Star Employees

Competitive Compensation Plan

A competitive and well-designed compensation system is a cornerstone of employee recruitment and retention for most organizations.

If you’ve ever lost a key employee because you weren’t paying them enough, you know the pain of not only losing a top recruit but also having failed to discover problems that could have been solved earlier in order to avoid the loss. Enter the Competitive Compensation Plan.

A competitive and well-designed compensation system is a cornerstone of employee recruitment and retention for most organizations. But 30 percent of U.S companies have no formal pay structure in place, and that number increases for small businesses to 50 percent of companies with 100 employees or less. Does your company lack a proper compensation system?

Why Compensation Strategy Cannot Be an Afterthought

When you have an ill-designed or inadequate pay system in place, you are more vulnerable to losing your top talent to employers who have solid strategies in place. And it’s usually your most talented employees who become frustrated if salary discussions are not addressed and handled professionally. Having a solid compensation structure in place is critical if you want your employees to feel secure in their compensation and career.

To successfully attract top recruits and to retain your best talent, you need to have a strategical and comprehensive approach before it’s too late. A competitive compensation package offers salaries on par with the market – or higher. Having a detailed and strategic compensation process can help you design such a package.

Here are some tips for bringing your compensation strategy to the front of mind for your organization:

  • Analyze and identify all the jobs in your organization – current and future – and set salary brackets in accordance with the related job title, along with the job descriptions.
  • Do some digging and try to discover the salary ranges of your competitors in the market for related or similar job profiles.
  • Also, remember to focus your research on the basis of geographical location.
  • Consider introducing commissions and bonus policies, which can help in motivating even your current employees.

You can create a competitive pay structure at your organization and be relieved of anxiety over whether your star resource will be poached by competitors. Your HR and payroll departments should start planning today. To get you on your way also do have a look at this interesting article by SHRM on Compensation Philosophy.

Stop Waiting and Start Working on your Compensation Strategy Today!

(This post first appeared in an AudioSolutionz blog)

By Melvin M

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