With global competition for talent increasing and today’s business environment, an organization’s ability to attract and retain talent should be at the forefront of their efforts. Did you know that you can attract, motivate and retain highly skilled, diverse and global workforces – even with limited budgets – by taking a more strategic approach to compensation management?
The primary focus of compensation is ensuring that investment decisions related to pay are made in an effective manner. Today compensation professionals can build processes that focus on primary objectives of compensation, to generate a return on investment and maximize the productivity of employees by using pay and other forms of rewards. Using compensation data to generate accurate predictions about an employees’ future contributions to a company requires managers to know each employee well and provide insight into the range of the employees’ full skills and capabilities.
Delivering compensation programs that engage employees and align business objectives is not an easy task. It is important to keep compensation plans aligned with financial and HR objectives. When you align compensation programs with business objectives you position compensation as a key component of your overall talent strategy. The result is a fostering of a performance culture.
When your employees can rely on trusted performance feedback and rewards that are promptly delivered, they feel valued. This encourages transparency between managers and employees which can help leaders communicate how staffing and pay decisions are made. Employees will always ask why they did, or did not, receive the pay that was expected. Managers need reliable and fair data to support these conversations.
Encouraging ongoing dialogue between managers and employees can help managers gain a deeper understanding of the contributions and capabilities of each employee. A coaching dialogue, instead of a rating system should be emphasized. This knowledge can lead to more effective and accurate compensation decisions in the future.
It is highly recommended to reward employees frequently and informally. The expectation of an employee is to deliver what’s expected of them promptly when recognition is offered with the same enthusiasm you motivate employees to do their best work. It is not always easy to reward outstanding performance at the time it occurs, but an effort should be made. Modern compensation solutions can help.
A well planned out compensation program will align award categories to behaviours you want to encourage. This is why a clear understanding of both financial and HR objectives is key. It will help incorporate your culture strategy and ensure rewarded behaviours support company values.
It’s important that you ensure that the company is investing in those employees who contribute more to the organization but that you stay within budget. The problem is that you can’t quickly test compensation strategies with spreadsheets. You need simple flexible intelligent ways to be more strategic, stress test and defend compensation models, that support both HR and business strategies. Different stakeholders will need to know that their priorities are being addressed. Proper solutions will allow you to be confident that your overall compensation program is as good as it can be.
Does your current compensation plan provide the following?
Encourage transparency between managers and employees
Reward employees more effectively
Provide better overall financial planning
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Aligning Financial and HR Objectives With Compensation Planning
Source: HR.com Articles