To be honest, it is not only appreciation that drives employees to commit to their work and reap beneficial results. Compensation plays a huge role in determining how much the employees will contribute to their work. Good pay also works as a tool for enhancing the rate of employee retention.
Here are some recent trends in compensation management:
Reorganizing the pay structure:
With the onset of the pandemic, remote working has become the new norm. Under such circumstances, companies need to decide whether the remuneration would remain the same in the case of onsite and remote workers. What organisations should do is to understand how to create appropriate pay models for employees who are working remotely. The differences in geography will also play an important role in deciding the pay here.
Providing performance-based bonuses:
Instead of having an annual increment programme, consider paying bonuses or incentives to those employees who have outperformed others and have achieved individual, team or company goals. This will not only encourage your employees to work better and harder but also put an end to the traditional system of paying everyone the same compensation.
Fixing up a minimum wage:
When employees do not receive a minimum wage for their time and efforts, chances are high that they are being exploited and thus, underpaid. To avoid this, companies should frame proper policies and ensure that all employees are receiving a certain base amount as their minimum wage. Anything beyond the minimum wage is dependent on specific performance and is thus, variable.
Educating employees about salary:
Your employees have the right to know in detail about the compensation that they would be receiving from the company. As a well-wisher of your employees, the company should take initiatives to educate employees about not only the monthly or annual compensation but also about the benefits, discounts, retirement contributions etc.
Ensuring pay equity:
The difference in the pay of male and female employees is a burning issue. Take action steps to eradicate this partial practice and list down immediate measures to curb the same. Of course, compensation varies as per the job role, designation, responsibilities etc. However, make sure that the difference in the pay is not related to the gender of the employee. A woman handling a particular responsibility at a particular post should be receiving the same compensation as that of a man.
Making payments transparent:
With increasing conversations between employees regarding their remuneration and bonuses, companies need to ensure that there is complete payment transparency. Equitable pay programmes are to be created based on certain principles, determining the payment to each employee. Make your payments more structured, fair and transparent. This will also help in enhancing the employees’ trust in the management.
Enhancing financial well-being:
A company can also extend a helping hand towards its employees by improving their financial wellness. Apart from providing a competitive remuneration package, consider ensuring that all your employees’ financial career is in a good state. For this, you can provide benefits like diminished health-related costs, loan repayment programs etc.