Top 10 Compensation Mistakes
10. Employers let employees scare them with data from
the Internet. There’s a lot of free data on compensation out there, says
Faurote, but that doesn’t mean it’s reliable—don’t let it be used against you.
With free data you get what you pay for, adds Ahlrichs.
9. Employers don’t think pay makes a difference.
High performers may care a lot about meaningful work and good culture, but
equitable pay is what gets them in the door in the first place, says Ahlrichs.
8. Employers don’t tell employees how their pay
compares to market. Faurote notes, if you don’t show them the facts, how do
they know they’re not underpaid?
7. Employers use the “peanut butter” approach.
Faurote clarifies this as meaning pay increases are spread evenly all across
the business. For instance, everybody’s getting a 3 percent raise—let’s hope
they are all happy with it.
6. Employers don’t do a good job identifying top performers
or top talent. A lot of research
shows top performers expect an increase that is one and a half times that of an
average performer, says Faurote.
5. Employers don’t use reward and recognition and
think small increases are enough. If you think just a 2 or 3 percent
regular increase will keep good talent around, it’ll bite you later, warns
Ahlrichs.
4. Employers see compensation as an expense and not an
investment. Employees are an investment, says Faurote—treat them
that way!
3. Employers try to solve all management problems with
compensation. Even if compensation is right, there can be other issues to
deal with, Faurote points out.
2. Employers think people are not going anywhere.
That’s been the case for several years, says Faurote … but that’s about to
change.
1. Employers don’t do anything! Don’t expect
compensation to take care of itself.
A Perfect Storm
Ahlrichs stresses the importance of avoiding these
mistakes. There’s a perfect storm coming, he says, where your high performers
are free to move and your managers have perhaps been spending too much time and
attention on the low performers (Faurote adds, they also don’t need to depend
on you for health insurance anymore). You’ve got to get your pay basics in
order so your high performers will feel like they’re a part of a
high-performing culture.
Setting an equitable and motivating pay structure—just
one of the many challenges in the brave new world of HR. Are you prepared for
changes that are unparalleled in scope and impact?
·
Employees all over the world, many of whom
you’ve never met in person
·
Technological advances and big data
·
Talent management challenges like Millennials
managing Baby Boomers you once thought would have retired years ago
·
Big data on everything from hiring strategies to
retention predictions
·
Sweeping regulatory changes in the areas of
health care, immigration, and privacy that have necessitated massive changes in
the way you do business
·
And the new normal—doing more … with less
Source: HR
Daily Adviser
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