A Compensation Program is the best way to establish a systematic way to determine proper pay rates for all of your employees.
This program accomplishes at least three objectives:
- Reducing or eliminating any financial liability associated with compensation;
- Motivating employees to superior performance and productivity; and
- Providing you with the assurance that you are paying your employees properly, fairly and competitively.
An effective compensation program, like the one we recommend, should meet two goals. First, it should demonstrate that employees are paid fairly, particularly when comparing one position to another within the organization. Second, it should demonstrate that employees are paid fairly, by comparing your overall rate structure to the rates which other similar employers in your geographical area and industry.
If both of these objectives are met, it is easier to state that your compensation program pays employees “fairly.”