Compensation

Ask any human resources consultant where financial compensationranks in the hierarchy of employee requirements, and you’re likelyto get a range of answers. Some say it’s the most important thing.Others declare wages are the only important thing. Still others saythat while financial compensation isn’t the most important thing,it’s important enough that if your pay isn’t fair, all the otheremployee benefits in the world may not be enough to keep employeeson board.

Obviously, it’s important to know whether you’re paying enoughand how to get the most for what you’re paying. In addition, youhave to know how to bolster the actual dollars you lay out insalary and wages with nonfinancial compensation.

You don’t pay employees in a vacuum. That’s another way ofsaying that the level of compensation that will attract and keepemployees is set primarily by other employers. While there’s noformula that will tell you the ideal salary for each positionwithin your company, there are appropriate ranges. Some of the keysources for determining suitable salary ranges for your employeesare:

• Classified ad listings for specific positions, both in yourdaily newspaper and on the internet
• Professional and trade organizations for the specific fields inwhich you’re hiring. Most organizations regularly publish salarydata.
• Human resources consultants
• Specialized recruiters in the appropriate fields

While no one can discount the importance of financial rewards,keep in mind that today’s job candidates are more concerned withcorporate environment and quality-of-life issues than ever before.In an executive survey conducted by Robert Half International,corporate culture rivaled employee benefits in importance forcandidates during job interviews. Many small businesses use thistrend as a competitive advantage, offering such nonfinancial perksas flexible work schedules, casual dress days, additional vacationtime and telecommuting opportunities. The costs of this approachare minimal, particularly when compared to the value-added benefitsof improved recruitment, productivity and retention.

Regardless of the monetary and nonmonetary ways you compensateyour employees, creating an employee-friendly environment anddetermining competitive compensation ranges take time. Both requirebeing flexible and adaptable to changing workplace trends and localconditions. The investment is worth it–the difference between agood company and a great company is its people.