Sure, you can find workers, but are you attracting the best ones to your company? Are your employees putting in effort to grow your business? Many employers do not give as much thought as they should about bringing top talented people to their organizations. They often think they hired the right candidates, but when they do not work out, they wonder where they went wrong in the recruiting process. One way in which employers can attract top talent to their businesses is by creating a competitive compensation plan.
Employee Compensation Plan
An employee compensation plan is when the employer provides the employee with their total amount of monetary and nonmonetary value in exchange for their performance at the company.
Some of the monetary features of an employee compensation plan are hourly pay, salary, bonuses, commissions, stock options, 401K, medical/dental/vision benefits, life and disability insurance, personal time off for sickness or vacation and paid holidays.
Some of the non-monetary components are training, phone usage, company car, breaks and a flexible work schedule.
Purpose
The employee compensation plan should reflect the company’s mission, values and culture. The employer should demonstrate its standards and beliefs through its monetary and non-monetary rewards. For instance, if the business touts that it provides a family friendly environment, then it should provide a flexible work schedule so that parents are able to come late to work or leave early to attend to childcare needs.
Recruiting top talent and rewarding employees are also objectives of the employee compensation plan. Many job candidates are not only interested in the salary of a position; they are also concerned with its perks. In order for employers to compete with other companies for the best workers they have to have a competitive compensation package. Businesses have to provide a good salary and other perks, such as, bonuses, remote work and personal time off, or job candidates would just go to other companies that offers them.
Many employees like to feel appreciated for the work that they do on their jobs. To reward performance, employers should develop a strong employee compensation plan. They can offer some features, such as, commissions, paid vacation time and free lunches. When employees feel like they are valued, they are more likely to stay with their current employer and continue working hard.
Creating an Employee Compensation Plan
To build an employee compensation plan, the employer should first do an analysis of the job market and its competitors. Businesses should understand what companies are offering their workers in their industry. Also, they should really examine what their competitors are giving their employees. Next, companies should evaluate their own data. They should look at their workforce size and budget to determine how much money and energy they can devout to monetary and non-monetary benefits. Next, when choosing the features of the employee compensation plan, employers should review their company values, mission and culture to ensure that their offerings reflect their beliefs.
Last, the employers should look at the monetary and non-monetary rewards from their employees’ perspectives. The employee compensation plan should showcase what the employees value. If most of the workers are retirement age, then they may appreciate a more robust 401K package than a happy hour event, which many younger employees may like better. If the employers do not know what is of importance to their workers, then they should ask them during meetings or request them to offer their opinions in a survey.
Conclusion
Employers must create an employee compensation plan to attract and retain top talent to their organizations.
