An effective compensation strategy is integral in attracting new talent and retaining and motivating the best performers. Yet, if not done appropriately, the way in which a company compensates its employees can lead to a number of negative effects.
Compensation should never be a guessing game or one based on gut feel, but rather should be based on a solid foundation of actual data. Data that needs to be assessed include items such as the company’s position against the market as it relates to wage rates, the company’s desired market position on wages, the company’s overall compensation philosophy, and available resources that the organization has to reward employees.
