There are a lot of different topics and opinions on how one should compensate their employees. No matter if you are a small business owner or a large corporation, you need to make sure your employees are well compensated for. Compensation is key in keeping key employees and driving them to be more productive and successful at their job.
Now you might be reading this and thinking why does it really matter? Or is what I have enough? What are the metrics when determining compensation for employees? One thing is for sure- low labor costs are the start and the end of low compensation. Employees who are well compensated will make your business more successful.
What does compensation mean for your organization?
Usually, compensation is the salary, wages, benefits, and variable pay received by employees from their employer.
Employee remuneration is frequently the largest operational expenditure for a company, but it may also be a strategic benefit. The biggest cause for voluntary employee departure is commonly identified as compensation. Indeed, one-fifth of job searchers stated it was the most important reason for quitting a job in the previous year. It’s critical to know how your team’s compensation is allocated so you can make educated decisions that will help you recruit and retain personnel. These employees pay measures will provide you with the information you want.
How to Metric Compensation for Employees
Keep track of adherence to tenure-based wage bands to see when it’s time to make market adjustments for your longest-serving employees. Any major variances may suggest that your pay ranges need to be reevaluated to better align with market expectations.
Compare an employee’s income to the middle of the wage range for their position. A pay rate in the middle of the range would be 1.0, which is considered fair for a fully competent employee. Scores of 1.0 to 1.15 are common among top achievers, whereas scores of 0.85 to 1.0 are common among less experienced persons.
What Are the Different Types of Compensations for Employees?
Here are some of the best ways to compensate your employees:
- Direct Compensation: The financial incentives employers give to their employees. Incentives and bonuses may be offered as well as salary and hourly wages. Commission-based jobs, for example, give staff an incentive to do more in order to receive higher pay. Employees may receive reimbursements for travel, food, and relocation expenses.
- Indirect Compensation: Employees can receive indirect compensation from an organization in a number of ways other than financially. These can include health insurance, paid time off, and retirement plans.
Compensation Without a Raise
Now sometimes you cannot afford to give raises to your employees. Taking this into consideration, we’ve put together eight (8) fun ways to compensate your employees:
1. Flex Time and Remote Work Options
By enabling flex-time hours and allowing employees to telecommute, employers will give employees more freedom to deal with the demands of life.
It will make life significantly easier for employees with young families to be able to work from home.
2. Leave Early Friday Days
To reward your staff for their hard work, you should consider reducing Friday working hours as a company-wide policy. Going home early on Friday can really boost a team’s morale. You might not want to do this every week.
If employees need to come in 15 minutes earlier each morning, employers can reduce their lunch breaks during other weekdays or limit the time for Friday early-finishes.
3. Weekly Free Treat/Food Days for Staff
When the office is having a bad day, some sweet treats can brighten the mood. Nothing brings people together like sharing yummy food – whether it’s homemade cakes or going out for lunch together as a whole team.
4. Fun Staff Days- Out of The Office
Any activity that allows your employees to converse and bond with one another can be considered a corporate day out. You can start off by planning a fun boat ride in the harbor on a sunny day, bowling or a fun team game outdoors. This also allows you, as the boss, a chance to get to know everyone better outside of work.
5. Staff Open Training Courses from Employer
Employees always love the chance to boost their career goals and take courses that can get them certified in different areas. Offering free training to your employees is another great way to show you appreciate them.
6. Staff Office Makeover
This is such a fun option! Giving your staff a chance to redo their workspaces creates more productivity from their part and also boosts morale. Adding fun colors, new office items, etc. is such a great choice.
7. Venture Option
This is a different option, but also works great. You can purchase an online store and give your employees a chance to run it jointly with you or even set them up with their own website for blogs or reviews etc.
8. Being THANKFUL for your staff members, say “Thanks for you hard work”
This simple yet effective way will always be a part of the list. Saying the simple words of “Thank You” always goes a long way with employees. Most employees like praises from their bosses. Tell them that you appreciate them and talk about some key points in their work that make them stand out from the rest of the staff. This is an uplifting option for your staff members.