Back in your parents’ day, pay was basically used to recruit, retain, and motivate employees – and it may have been useful for some of that. Largely, it was an entitlement. Today’s savvy employers are realizing that pay can be used for so much more – from aligning employees with strategic goals to rewarding their demonstration of company values. The components of pay can and should look a lot different today than they did even 10 years ago. It’s a different world, and in that different world, pay can create a sense of ownership for the right employees. After all, you get what you pay for.

 

Designing an effective pay strategy that fits what an organization can afford - while being competitive and motivating - is more of an art than a science. Some employers try to make this more objective than it is, relying blindly on salary surveys. In reality, those surveys are only a snapshot at a given moment in time. They become obsolete quickly due to raises given, decreases imposed, and changes in staffing... particularly in this economy. Some employers try to make this more subjective than it should be, creating elaborate systems to determine what they call “internal equity.” This can create a ratchet effect, where salaries escalate because of perceived equalities with incongruous positions. That’s why the design and implementation an effective pay strategy has to be done more like art than science.

 

Open Door HR Solutions endorses variable pay wherever possible, creating a pay delivery mechanism that does not merely annuitize performance-based increases. We utilize a combination of corporate, team, and individual rewards, with an appropriate combination of objective, numbers-driven performance, and behavioral, values-driven criteria, to reinforce both the performance and the behaviors that are crucial to business owners. In other words, our goal is to help employees think more like owners rather than employees. We use pay delivery as one method to reinforce that.

 

We utilize resources including ERISA attorneys to help companies implement Qualified Profit Sharing and ESOP plans, creating true employee ownership where appropriate.