Developing an Effective Compensation Plan
Establishing an effective compensation plan is important for any growing business. A thoughtful plan can have a positive impact on overall productivity, company finances, employee motivation, retention rates, and more. Here are some creative ideas for enhancing your compensation-related strategies. All of these ideas involve a willingness to actively engage prospective employees during the evaluation process. That means taking the time to get to know the prospects and asking them relevant questions.
Value Aptitude and Potential
Experience is important, but don’t underestimate the value of a less experienced employee with a positive attitude and aptitude for long term success. Many recent graduates and individuals with limited experience are motivated to learn and to embrace new challenges. Their enthusiasm to grow and contribute can have a positive impact on other employees.
Hire Recent Immigrants
Don’t be distracted by extreme stereotypes about immigrants. Plenty of individuals moving to the U.S. have valuable experiences from their native country. Many are also highly motivated to demonstrate their value with a new employer.
Many employees are motivated to earn monetary incentives in the form of bonuses and commission plans for achieving specific goals and positive results. A commission only position may work for some individuals, but most employees prefer more stability. In other words, be flexible in your approach to match the incentives with the job at hand and the personal motivation of individual employees.
Ask Your Employees
The best way to develop a compensation strategy that will keep your valued employees motivated is to seek their input. It’s not just about money either. Many employees can be incentivized with other incentives like additional paid time off, or even special job training to enhance their value longer term.
Don’t Forget Equity
In some instances involving highly desirable professionals, consider offering some form of equity as part of the compensation plan.
Outsource Non-Essential Jobs
One way to free up more cash for your top employees is to outsource some functions to freelancers or service companies. If you are going to contract with a service company, however, make sure you have a small business background check policy.
Know Your Limit
It can be challenging to balance the need to attract and retain qualified staff within a company budget. Work with your management team to know what the limits are in the budget ahead of any negotiations with a prospective employee.