When you start a business, the idea of proper compensation of employees is not often a primary concern. There may be a budget and a business plan. However, compensation is just a number at that point. The challenge changes once you put people into those positions and the discussions of compensation come up.
Fair And Balanced Compensation
Fair and balanced is not just a phrase for Fox News. This also should be your goal for compensating employees. It would be awesome if we could just pour money on our employees, but that is just not reality. Instead, we have to balance to value brought to the company with a desire to compensate our employees in a way that makes them feel valued.
Of course, we could talk for hours about non-monetary compensation. That is an excellent way to handle a situation where finances are tight. However, money talks. We look at ways to increase the impact of a bonus or a raise.
Timing is Everything
Timing is a critical factor in how a raise or bonus is received. In fact, when combined with expectations and communication I think you have the three most important factors in determining the impact of these actions. A bonus that is handsome, but well under expectations can go so far as to lead people to quit. On the other hand, a “surprise” bonus can be a large morale booster. However, the “wow” factor is not all to consider. The message you send about work ethic, rewards, and expectations all need to be part of the mix.