Compensation management does not begin and end with a paycheck
Compensation management is more than just about cash. There are things you can do that don’t cost the company money and they prove to be very effective in getting the most from employees.
In compensation management, look at what the employee wants
A number of surveys have shown that certain non-monetary items are in some cases more important to employees than money. Essentially when you ask employees what are the best forms of reward and recognition are – these are the things that they come up with — praise from the manager – that’s easy. That’s cheap. Providing employees with some information to do their job, involving employees in decisions that affect them, asking employees for their opinions and ideas, supporting them when they make a mistake, autonomy, authority, allowing them to pursue ideas, giving them a choice in work assignments, flexible working hours, learning and development opportunities and again, having time with their managers.
These all show up on surveys. And they don’t cost anything to do. So if you’re not doing all these things, you should try to do more of it. I think the amount of time and effort you get to support these kinds of thing will take more pressure from the compensation program, which you may not have the cash to do much with anyway. Look for a non-monetary reward.
Tie your compensation management to your corporate goals
Other kinds of things you could do that do cost something but maybe not as much as actually giving somebody cash are contests or gift certificates, merchandise tickets. The trick here with non-monetary rewards though is to – and get the most out of these kinds of things is first and foremost, be clear about what you want the recognition program to do, okay, or achieve — certain milestones, targets, behaviors, et cetera.
Be very specific about that when you start considering these kinds of things. Be fair in the application of the rewards. Don’t use compensation management as a mechanism to play favorites or to make up for something else that they don’t have.
Ensure clarity in your compensation management system.
Why is the employee receiving this award specifically? If they don’t, there’s going to be some confusion and you’ll have less consistency in your application.
Edited remarks from the Rapid Learning Institute webinar: How to Set up Fair and Effective Pay Plans in an Uncertain Economy by Rick Olivieri
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