Basing compensation around your business strategy ensures that you reward employees for work that has great benefits to your organization and increases the likelihood that you meet your goals. However, aligning the two can be more challenging that it first appears. To make sure that they are actually linked, you need to start at the very beginning, analyzing what both mean and entail.
What Are Your Business Goals?
Your business strategy is the way that you intend to enable your organization to grow. You should be able to define your strategy through a few short sentences that detail your business goals. Examples include increasing sales with current customers, expanding your client base, growing your product line, and entering a new market. To determine your business goals, identify your current strengths and weaknesses and consider whether you are straying from your mission or company philosophy.
The next step is to create objectives for the next three to five years: a combination of short-term and long-term financial and non-financial goals. Your business strategy entails identifying methods to confirm that you are moving closer to meeting these goals, which will enable you to reward the employees who played a role. Such means may include increased sales, better cost management, higher customer satisfaction, or greater productivity.
Bear in mind that your business goals are constantly changing, often without you noticing. Revisit your business strategy frequently to realign it to your compensation strategy.
Types of Compensation
A big concern for many companies when they hear the word “compensation” is cost. In fact, there are plenty of ways to retain employees and increase productivity by using a compensation method that keeps expenses low. Some such examples are:
- Creating a positive work environment.
- Offering reduced working hours.
- Developing customized benefits for individuals.
- Providing group rewards in addition to team incentives.
- Offering deferred compensation, like unvested stock.
Whatever you choose should be relevant to your organization’s philosophy and support your business strategy. However, it is also important to talk to employees and find out what they consider good compensation, which will avoid workers feeling undervalued for their work.
One of the best ways to stay on track with your compensation strategy is to use Total Compensation Reports from COMPackage. Our solution is suitable for organizations of every size. It features customizable templates to enter your data and it calculates benefits according to your business strategy.
Contact us a COMPackage to find out more about how you can simplify your compensation statements while ensuring that your business moves in the right direction.