Every investment in a business needs to be done judiciously to ensure maximum returns. Paying salary to employees forms an integral part of the company’s total budget hence, it’s crucial to frame a well-structured compensation plan that fairly meets all the vital criteria. You can always take the help of a renowned HR consulting company to get the best of your compensation plan.
CerveauSys is one of the leading HR consulting companies known to offer top consulting services in Pune. Our business strategies and HR and OD consulting services have brought strategic performance improvements in multiple organizations.
Here, we give you some basic guidelines on which you can build a sound compensation structure:
- Define Your Pay Objective: Having clear thoughts about the pay philosophy is very important. Here you need to focus on the complete compensation package that would not just include salary but also benefits, commissions, incentives, and other perks offered by the company. To arrive at an ideal solution, analyze questions like how to scale performance for incentive scheme, what type of encouragement will boost your employee’s productivity, are cash benefits more lucrative than other perks, etc
- Evaluate the job’s worth: knowing the job’s worth helps you to decide the salary package and determine how negotiable it can be made. There are some jobs that have a very strong internal impact and are vital in carrying out the organization’s critical strategies and achieving business goals. For these roles, you definitely need to have a better compensation scheme as they have a significant contribution to the company. You can actually slot grades or class of jobs depending upon the job description, skill requirement and its value to the company.
- Calculate Market Pay scale: Employees often get motivated or disoriented when comparing their salaries with other company’s offerings, for the same job role. To offer the best package without causing pressure on the business budget, collect data on what other companies in your industry are offering to the related job profiles. This will help you compare the relative strength of your compensation plan and accordingly plan whether or not you need to make changes to the compensation package.
- Identify which benefits to pay and determine the costs: Research about the standard benefits in your industry like health insurance, life insurance, sick leave, annual leave, etc that you would like to offer to your employees. Here you also need to calibrate the cost of these benefits in order to strike a balance between the expenditure and revenues of the company. You can avail the services of a financial consultant in Pune like CerveauSys for better compensation plans.
- Adjust compensation with your budget: While outlining the pay structure you will have to keep the budget limit in consideration. You can’t afford to overspend nor pay less than the standard scale. IF you are a small business with limited cash flow then you might need to offer low compensation or you could offer performance-based compensation so that you can reward employees if the business takes off.
Compensation planning is important to the success of every company because happy employees are key to the organization’s growth. A well-balanced compensation plan requires research, careful consideration and a bit of data crunching. Use these guidelines to develop a plan that turns out to be lucrative for both employer and employee in the long-run.