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It is well-known that excellent compensation programs can positively impact everything from staff behaviour to strategic objectives in every organisation.

A recent poll by HR Software provider CIPHR revealed that only 41% of UK employees think they are paid their worth. Therefore, it is prudent to design a solid compensation strategy for your company to keep current employees satisfied, productive, and less likely to jump ship, as well as attract new talent. Here are some effective tips for designing a great compensation strategy for your organisation.

1. Consider ages

Employees of different generations will have differing needs regarding benefits and compensation. For instance, young workers won’t be thinking about health care and retirement as much as their older counterparts. Therefore, consider offering a higher salary and fewer benefits if you want to create a youthful workforce. On the other hand, giving more benefits is advisable if you wish to keep senior employees or reduce general turnover. However, ensure that both generations benefit from a wellness program to remain healthy and productive.

2. Gather relevant data

Data-driven decision making is key in modern organisations of all sizes, and your enterprise is no exception. Therefore, collect sufficient data from multiple trusted sources to identify market trends and position your company appropriately. Some of the essential information to gather include the various job descriptions of all positions, current compensation structure, and employee sentiments on their current salary. It is also crucial to find out how geography impacts employee compensation. It might be cumbersome to gather the information you need to design your compensation strategy from multiple sources. Thankfully, solutions such as Horsefly Analytics have all the datasets you need to ensure your team is fairly compensated, so keep this in mind.

3. Develop a compensation philosophy

Many experts recommend defining your company’s reward philosophy before deciding on a compensation program. Your reward philosophy is the basic principle underlying the compensation strategy. An excellent compensation philosophy will support your company’s operations, boost competitive advantage, and support strategic plans. This compensation philosophy must specify what you want to pay for, how you want to pay for it, your competitive posture, and how you will split the benefits. The values and beliefs of your CEO and management team are also crucial in determining your compensation philosophy. Many organisations link their compensation strategy to performance in modern times, so high-performing employees claim better perks. You can simply adopt this approach to maximise your return on investment in employee compensation.

4. Offer total rewards package

A total rewards strategy gives staff a mouthwatering package of good base pay, bonuses, benefits, and some perks. This type of package can allow you to pay less than competitors and still keep employees satisfied because of the attractiveness of the overall benefits and compensation packages. Indeed, Adler’s research shows that two-thirds of workers in the UK think that employee benefits are equal to or even more vital than their basic salary. Consequently, consider offering low-cost benefits like commuting or parking reimbursement, flexible working hours, paid time off, and on-site daycare or a daycare stipend. You can also create morale-building initiatives like employee of the month awards to satisfy staff.