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.

Rob Broadhead

Rob is a founder of, and frequent contributor to, Develpreneur. This includes the Building Better Developers podcast. He is also a lifetime learner as a developer, designer, and manager of software solutions. Rob is the founder of RB Consulting and has managed to author a book about his family experiences and a few about becoming a better developer. In his free time, he stays busy raising five children (although they have grown into adults). When he has a chance to breathe, he is on the ice playing hockey to relax or working on his ballroom dance skills.

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