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.
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.