You have seen the pay forecasts for 2015 of 3.1% increases. But what does that mean to you? To your organization? To your employees?
Small organizations cannot afford the big compensation research and expertise of large ones. But you can be sure your pay program supports the values and goals of your own organization without all the information and processes they have. And you can gather relevant, current market data from your network plus state and federal labor market information.
The first step is to think about your mission, your values, your goals. How do pay and benefits fit into these? Want some insight into how companies address these issues? Look at the very different pay and benefit structures of Walmart and Costco. These are well documented, so a little searching will show you how Costco values employee retention and development as critical to customer service and thus pays higher wages and offers more benefits while Walmart is willing to accept high turnover to keep pay and benefits low.
In preparing your pay budget for 2015, it also helps to know a little about others. In 2013, 87% of companies gave pay raises. But very few gave every employee a raise. Most companies try to tie high performance to higher pay raises. In practice this means that lower performance levels mean no or under 0.5% pay raises
High performance is an obvious choice to base pay raises on. However, to support your culture and goals, you may want to consider other reasons to increase pay. If your organization is in an area of rapidly changing technology, you might reward the employees who learn new skills. If customer service is critical, that may be a factor.
Critical to any successful […]