Employees want to know how much they will be paid for doing what. And they care that the amount they earn is aligned to their needs for things like housing, food, clothing, safety, security, etc. Maslow’s Hierarchy of Needs is the image above so use that as a reference for what people care about.

Employers want to know how much they will be paying for people who will do the work they need to have completed. They need to balance competitive pay with internally equitable pay decisions and their budget.

The compensation foundation that any employer needs is:

1) a base pay range assigned to the job

2) a process to make consistent pay-related decisions that consider factors that are not discriminatory

3) an ability to plan for the cost of labor and cash flow to pay the employees on time

4) short-term incentives like a bonus or sales commissions are optional for some jobs and necessary for others

The basics can be delivered in a way that is complicated or simple. I prefer simple.

Simple design. Simple to communicate and understand. Simple to administer and deliver. Simple to update. Simple wins over complicated. Every. Single. Time.

Complicated is 50 plus page PowerPoint presentations.

Complicated is meeting after meeting with a large project team.

Complicated is misunderstandings and complex communications.

Complicated is page after page of incentive plan documentation.

Complicated is a complex Excel spreadsheet with crazy formulas.

Complicated is a distraction from getting the essential work done that delivers value to customers.

Complicated makes the employee experience worse.

Complicated eventually requires cleanup and simplification to support the long-term viability of the business.

What compensation world are you living in? Simple or complicated?

#compensation #incentives #rewards #humanresources #payequity #paytransparency #simple #complicated

Source: Simply Psychology