Seven keys to a robust compensation system
Posted by Anadi Upadhyaya on September 12, 2011
The seven keys to a robust compensation system that will help you in attracting, retaining, and motivating the workforce are:
- You should have a fair compensation policy in place and it should be easily accessible to your workforce.
- Your compensation policy should be context sensitive. Market data should be used wherever appropriate to keep it fresh and competitive.
- Your compensation revision schedule (e.g. salary revision cycle) should be communicated to the workforce in a planned manner and in advance. Open communication will help your workforce to focus on their duties instead of wasting energy and time in waiting and guessing about it.
- Compensation should be linked to the performance. It will keep performers motivated and will help you to retain them.
- Policy execution should be monitored regularly to make sure policy has “Buy in” at all the levels and execution is not diverting from the planned objectives.
- Your compensation policy should be open for feedback. Proper and industry accepted channels should be established to achieve this.
- You should have a built-in audit capability to detect and correct any compensation discrimination. It will save your brand and increase employee engagement.