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7 signs your employee compensation could use a boost

There’s a fine line between getting employee compensation right and getting it wrong. Obviously, you want to get it right. Taking the time to explore the resources at Compensation Today, including articles such as this one, is a great start.

There’s a fine line between getting employee compensation right and getting it wrong.

Obviously, you want to get it right. Taking the time to explore the resources at Compensation Today, including articles such as this one, is a great start.

But there are other ways to determine if your compensation program needs a little something extra to make it even better.

We’re talking about reading the signs that your compensation program could use a boost.

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Sometimes the signs are so subtle they’re easy to miss. Other times, the signs have been around so long they’ve been accepted as normal. Still other signs are glaring, but maybe you haven’t known how to address them.

Whatever the case may be, read on to learn the signs of a compensation strategy gone astray. Of course, we provide actionable steps to correct them.

Sign #1. Employee tardiness and increased use of sick leave

One of the first signs that employees may not be earning enough is a lack of enthusiasm about coming to work. More frequent tardiness, call-outs, and no shows are all signs your employees may be trying to avoid work. Get a good system for tracking employee attendance, and enlist your management team to find out why employees have developed such bad habits. Pay could be the problem.

Sign #2. Lower-than-average retention rates

Got employees leaving after just a few months on the job? This could be a sign that the compensation isn’t right. Consider benchmarking your positions against the market. PayScale is a good resource.

Sign #3. Employee grumbling

When employees believe they aren’t earning enough, complaints often follow. Some employees may even start talking about what the competition pays. Keep your ear to the pavement, and try to get at the root of the grousing. If it’s money, and your employees are good performers, consider ways to boost the compensation.

Sign #4. Lagging recruitment

Salary and other forms of compensation are top selling points with candidates. So, if your recruitment efforts aren’t getting a good response, this could be a sign you’re not offering enough incentive. Think about raising the bar a little with a more generous benefit package, coupled with a slightly higher salary and a few unique company perks.

Sign #5. Low benefit enrollments

Employee benefits are a critical part of any compensation package. If your employees aren’t enrolling in and using their benefits on a regular basis, it could be the benefits aren’t perceived to have much value. That’s a waste of money and a morale buster. Review benefit enrollment on a regular basis and make adjustments as needed, using employee input as a guide. Some of the most popular benefits, like flexible work schedules, don’t cost anything at all.


Sign #6. Friction during performance reviews

Increased friction during performance reviews is a sign that something is out of whack. Reviews can be tough no matter the circumstances, but increased conflict between management and employees in this area is cause for concern. One solution is to schedule salary increase a few months after the performance review. Use the performance review to focus on performance and development only, and leave the pay talk for another day.

For example, you could schedule reviews in January and then process any pay raises with your fiscal year beginning in July, or whenever it makes sense for your company.

Sign #7. Negative exit interview feedback

Pay close attention to what exiting employees have to say about their compensation. Because they’re leaving, they may be more likely to speak honestly and openly about wage dissatisfaction. Use this information to improve your compensation program for both future and existing employees.


Tess C. Taylor
Read more from Tess C.

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Bob MoklowiczWayne ForsterTom BakerDebbie Jones Recent comment authors
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Wayne Forster
Wayne Forster

Compensation should definitely be separated from performance discussions, not just in terms of schedule but also completely de-linked structurally. Compensation is determined by a number of factors, including the going market rate for the position, competition for labour, financial capability of the organization, etc.

Debbie Jones
Debbie Jones

What are your thoughts: You have an employee, who is the only person hired and available to perform a specific duty. This duty has to be performed at varying times and days, morning, night, week days and/or weekends with no predictable consistency. This employee is also responsible for many other duties which need to be performed during normal Monday through Friday working hours. These daily duties can consume an expected 8 hour work day. This employee is paid a salary based on a 40 hour Monday through Friday work week. Then you tell this employee to adjust their normal 40… Read more »

Tom Baker
Tom Baker

We have found that compensation is most effective when it goes beyond market rate. Compensation should be an investment rather an expense which means performanc must be an integral part of compensation.

Bob Moklowicz
Bob Moklowicz

RE: Debbie Jones, 7 Jan: What are my thoughts, Debbie? First thought is, I’d sure like to come to work for YOUR company! No idea where you are or what industry you’re in… In the Silicon Valley (CA) Semiconductor industry, all direct support (non-assembly) employees are EXEMPT due to a special loophole in the wages and hours law exempting so-called “computer workers” (only vaguely defined) from being covered by the laws linking time worked to compensation paid. This gives management a free hand, especially in the employers’ marketplace in which employees have been struggling for the past six years. At… Read more »

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