One of the number one concerns for employees – whether they are currently working for your organization or you have not recruited them as yet – comes down to exactly how much you are paying them. This can impact everything from employee satisfaction levels to how well and easily you can retain them over time.
Setting salaries can be a complicated affair and it is not easy to know for certain whether or not you are getting it right. At the same time, you also need to be in the habit of continually reassessing to ensure that your salaries are correct and proper. So, here are a few top tips that can help to ensure that you are getting your employee pay packets right.
Check Out Average Market Salaries
First of all, you need to look at where you are currently from the point of view of ensuring that your salaries are right from a market standpoint. This means checking out some of your main competition and ensuring that what you are paying matches up with them – or even exceeds expectations. If you are paying significantly lower than what appears to be normal, this can seriously impede your recruitment process and can also lead to a situation where you are bringing on board members of staff who are simply not up to the job that you want them to do. This will negatively impact your business in both the short and long term.
Set a Range of Salaries within Each Position
Setting a range of salaries automatically means that you are going to be able to increase pay packets, depending on who is doing the job well, as well as giving an incentive for members of staff to strive to reach the next level. At the same time, you also need to consider transparency. People don’t want to find themselves in a position where their pay is seriously lower than people doing similar or identical job roles, unless there is a very good reason why this is the case. The right payroll software can help.
Analyse the Value of Job Roles
All job roles are supposed to bring value to a company, but some are going to be more advantageous than others. Ultimately, you certainly need to ensure that what you are paying more than measures up to the value that the role is bringing to the company as a whole. This is why some jobs naturally come with performance-related bonuses as the money that they are bringing to a company can be actively measured. At the same time, you certainly don’t want to feel like you are paying people less than you should be and therefore signalling to them that you do not value what they are doing.
Relate Salary Increases to Hitting Targets
When it comes the time to review salaries regularly or because you are asked by members of staff, you need to think about how the increases that you are offering directly relate to targets that have been set out. This is one of the best ways of ensuring that any pay increases that you do offer are going to be naturally linked to advantages that are being provided by members of staff in terms of their own development and how they are contributing to the success of the business as a whole.
Relate It to Company Performance
You certainly need to keep in mind that the salaries that you are paying out are going to represent a big chunk of the money that your company is paying out. With this in mind, you always need to keep a close eye on company performance to ensure that you are still able to keep up with necessary pay rises.
At the same time, this is something that can be communicated with staff so that everyone is on the same page and pulling in the same direction.
Setting salaries can sometimes feel like it is a tough ask, but these are just a few of the main ways that you can make it easier and ensure that you are getting it right. Ultimately, this can have a major impact on what you are achieving as a company in general.