A Guiding Light for Employee Compensation

by on June 11, 2009 · 0 Comment POSTED IN: HR Info Center

An employee compensation plan that’s boring, but comforting

If somebody were to ask you, “What’s your employee compensation philosophy?” try this one. We pay you fairly for what you do. We look at the market place, we find out what people are getting paid to do the kind of work you’re doing and we try to pay within a reasonable range of that little – sometimes a little high, sometimes a little low, but we try to target the market, pay within the market and differentiate ourselves in other ways. We pay you fairly for what you do.

That’s a pretty easy way to explain things. It’s a guiding light for employee compensation and if you adopt that philosophy, it makes it very easy to talk about what you’re doing. It also makes it easy for a good employee to come in and say, “Hey, boss – I think we’re out of whack on my philosophy. You know, I’ve been offered three different interviews here for jobs that are paying considerably more. Can I share that data with you and can you help me out.”

You’d probably rather have that conversation with somebody at that point in time than wait until they’ve taken the job down the street for somebody else. That gives you an opportunity to make a deal with the trader if they tell me they’ve accepted another position and now I have to try to present a counter-offer.

This employee compensation philosophy isn’t glamorous. But it can be comforting. Your managers as well as your employees will think it makes sense. It says, “It’s logical. This makes sense. And I can live with that”.

Edited Remarks from “Salary Talk: How To Discuss Pay So Employees Feel They’re Treated Fairly” by Gary Markle

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