Rewarding your employees properly is not about giving them as much as possible, but rather it is about making sure they feel they are being fairly compensated for the work they are doing.
Here are 10 great tips for making sure you’re rewarding your employees fairly. Enjoy!
1. Periodic Benchmarking
Try to run a regular check-up on what the average rates are for similar roles in companies of a similar size. If employees feel that you are paying them significantly less than other companies are paying comparative roles, they are likely to feel unfairly compensated, and are likely to seek employment elsewhere.
Try to keep salaries on or around the going rate, and try to review this at least once a year.
2. Pay The Living Wage
If you’re trying to get away with paying as little as possible without legal ramifications, chances are you’re approaching this the wrong way!
As well as the legal minimum wage, there is a guideline called the ‘Living Wage’. This widely-accepted rate is different depending on whether or not you are operating within London, and you can check the going rate using this Living Wage Calculator.
3. Create a Transparent Reward System
You don’t have to publish everybody’s individual salaries in your weekly company newsletter, but you should consider communicating with your staff how their pay rates are calculated. For example:
– Do you pay more than, less than, or roughly the same as the going market rate?
– Are certain roles paid higher than the market rate? If so, why?
– Do you review pay rates? How often, and using what criteria?
Reward systems that are not perceived to be fair will quickly demotivate your staff. Showing people that you have nothing to hide will help them realise that you’re trying to be as fair as possible.
4. Avoid Favouritism
If two people are doing exactly the same job and getting exactly the same results, they should receive the same compensation – regardless of how much you like them.
Naturally, there are exceptions to this rule – such as if one has been at the company longer, and you have a loyalty scheme setup – but if you are paying more based on your personal opinion of somebody, it will quickly get spotted by other employees, and you’ll have a big motivational downturn to deal with.
5. Recognise Top Performers
There is nothing unfair about paying more for better results. Even if you aren’t able to pay more in cash, at the very least, you should be showing appreciation to your top performers!
If a great performer feels under-appreciated, they will either stop performing so well, or they will leave your company. Where possible, try to make sure at least a small part of an employee’s pay is performance-related.
6. Pay Bonuses Fast
Whatever it is your employees have to do to earn a bonus payment – whether that’s closing a sale, clocking up overtime or even just finishing a project – you should aim to make the time between achievement and payment as short as possible.
Studies show that the faster you pay a bonus after the required task has been carried out, the more powerful that bonus is as an incentive.
7. Reward Teamwork
Don’t exclusively create reward schemes that encourage strong individual performance. Individual performance is great, but not when it encourages people to throw teamwork out the window.
A good example of this in a sales team, where you paid a bonus to employees hitting their personal target, but also organised something fun for the whole department if they hit their overall target.
8. Ensure Equal Opportunities
In this context, what we mean by ‘equal opportunities’ is giving all of your staff an equal chance to progress and succeed with your company.
For example, when a new vacancy opens, make sure you advertise the role internally. And, as already mentioned in point 4, don’t offer your favourite employees any special treatment!
9. Run Regular Competitions
Competitions are really fun ways to show that you are trying to reward your staff fairly. Of course, you need to make sure they give everybody an equal shot at winning the prize!
Competitions are great at encouraging specific behaviours. For example, if you’re struggling to respond to all customer service tickets on the same day they come in, you could offer a small prize to the customer service representative with the fewest un-answered queries at the end of each day.
10. Create Role-Specific Pay Ladders
The best way to create a fair and transparent reward system, is to develop a set pay ladder for each main role within your company.
The pay ladder should detail specific pay levels that correspond to objective metrics such as productivity levels, new skills learned, and length of time with the company.
This is a popular method in many public sector organisations, and it encourages employees to be loyal, to improve their skills, and to perform well.