What is the definition of value? According to Merriam-Webster it is “The monetary worth of something; a fair return or equivalent in goods, services, or money for something exchanged; relative worth, utility, or importance.” Are you showing your employees that they are valued?
While most of the definitions refer to a monetary value, they also contain a reference to importance and relative worth. While competitive pay is a large way in which employers can show that they value their employees, if that’s the only way value is shown, employee engagement will likely be low.
It’s important to take a comprehensive approach to expressing how an organization values its employees. The steps to building a more comprehensive approach include:
1. Develop a formal compensation plan – Salary data is at your employees’ fingertips. They can take online salary surveys, talk to peers, etc. It’s important for an organization to have a consistent compensation plan based on jobs, not people. New employees should not be earning more than current employees with similar job descriptions and comparable experience. They also should not be earning more vacation or other additional benefits. Doing so, shows that the organization places a higher value on negotiation skills, then performance or loyalty. Having a set compensation plan will avoid unintended pay inequities.
2. Communicate Regularly About Pay, Benefits, and Performance – Employers should communicate with employees regarding pay and performance on a regular basis. Doing so takes the compensation plan from theory to reality and makes the employee feel valued. Don’t let employees find out about a benefit change the hard way. Communicate any changes up front. Consider this – 82% of employees who have lower than the market-average salary, feel satisfied with their work as long as they have received clear communication as to why it’s lower.
3. Provide Growth and Learning Opportunities – Part of this step includes regular meetings regarding performance. During these meetings career growth and skill development should be discussed. Employees feel valued when an organization is willing to invest in their continuing education. As Richard Branson once stated, “Train people well enough so they can leave, treat them well enough so they don’t want to.”
4. Align Performance and Compensation Increases – This goes back to step 1 – developing a formal compensation plan. Part of that plan should include how performance will influence changes in compensation and how often compensation is reviewed. Employees should know when to expect a compensation review and what factors will be assessed.
Additional ASE Resources
Compensation Consulting – ASE can assist you in developing a formal compensation program. Whether you need to update an existing plan or start from scratch, ASE can help. Contact Kevin Marrs for more information.
Compensation Surveys – ASE’s compensation survey data is benchmarked and specific to Michigan. We offer the most comprehensive data in Michigan. The 2019 survey data will be released in May. For more information contact Jason Rowe.
Talent Development – ASE offers over 100 unique talent development courses throughout the year. To view upcoming courses, click here. We also offer custom training and team building and leadership onsite courses. For more information on those, please contact Tony Kaylin.
Compensation & Benefits Conference – The 2019 Compensation & Benefits Conference will cover everything related to Total Rewards including compensation, wellness, pay equity, employee recognition, pay for performance, and more. Register here. Early bird ends today!