Enhancing Morale With Financial Motivation: Tips For Utilizing Compensation Strategies
Many people who open a small business do so because they have a talent in or passion for a particular field. However, while you may be a skilled craftsman or artisan, it's likely that the corresponding business skills may take longer to learn. As such, it's important that you constantly seek out ways to keep your employees happy and motivated.
Diverse compensation strategies can be a great way to motivate the people who work for you, but it's important that you understand how best to utilize them. Below, you'll find a guide to using some common types of compensation strategies in your small business, allowing you to build a strong relationship with your employees that's based on more than hope.
Scheduled Bonuses
The regular and reliable bonus is perhaps the most tried and true way of creating financial motivation for employees. The timing of the bonus is of course important; many employers tend to distribute them at the end of the year, as doing so is a fantastic way to motivate employees who may otherwise be distracted by holidays or seasonal doldrums.
The structure of the bonuses you distribute is ultimately dependent on your business's cash flow. Most commonly, employees with similar experience are provided bonuses in structured tiers, as this takes any appearance of judgment or impropriety out of the process and allows for a feeling of equality among the recipients.
Commission Bonuses
Commission-based employment can be difficult struggle for some people, but for others, knowing that they'll receive additional funds for additional work can be highly motivating. Indeed, lucrative commission packages can be a great way to attract new employees and bring them in to a growing firm.
Even if you would prefer to compensate your employees through a set salary structure, offering some commission bonuses can be a great way to push them to the next level. Consult your financial services firm to determine what percentage of sales you can offer to your employees as a push to enhance their performance.
Regular Salary Review
More than anything else, the best way to keep an employee content with his or her compensation is to make sure they feel as though they're being heard. If you establish a rigid compensation structure and then refuse to meet to discuss it, you're likely to face frustrated employees who don't believe that you truly have their back. Setting up reviews as frequently as semi-annually can be a great way to have an open dialogue about compensation and make your employees feel truly appreciated.
For more information, contact a company like Fox Lawson & Associates, A Division of Gallagher Benefit Services Inc.