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Compensation - 5 Step Plan
Safari Solutions Newsletter March 2005, Volume #18
Do you effectively compensate your employees? Don't wait until a star employee quits to find out. Take time now to review your compensation plan to make sure your valued employees are getting paid appropriately to accomplish what you want them to do!
Ann Clifford
Dos and Don'ts
Can you ask a candidate the following question?
"Is this your maiden or married name?"
(Answer provided at the end of the newsletter.)
Sales People-Go Forth and Sell a Lot!
"Go forth and sell!" Does this sales strategy create the results you desire? It might, if your sales people are paid on straight commission based on gross profit intended to drive them to the easiest, quickest, and most lucrative activity. But, what if you want your salespeople to open new accounts, promote certain product lines, or emphasize certain accounts that build market share? Dave Kahle, a sales compensation consultant, has a five-step process for designing a sales compensation plan that supports your long-term company goals:
Compensations Components
An employee's compensation includes more than just base salary. When discussing compensation with employees, be sure to show them the total package. Below is a breakdown (as a % of total compensation) of the major components along with national percentages for each category.
Salary, wages, supplemental pay (74.1%) Health, life, disability insurance (7.1%) Retirement and savings (3.5%) Vacation, holiday, sick leave (6.4%) Social Security, unemployment, workers compensation (8.7%) Miscellaneous benefits such as tuition reimbursement, gym memberships, discounts on company products, etc. (.2%)
(Source: "Bureau of Labor Statistics" www.bls.gov)
Can I Have a Raise?
Are you prepared for this challenging question asked by an employee, "Can I have a raise?" Here are a few key things to consider that can guide you:
Why: Determine why they want or deserve a raise. Is this employee asking for a raise out of personal want or need? Does the employee feel like his or her contributions merit a higher salary? Will you lose this person if you do not give the raise?
Value: Objectively evaluate how this employee has contributed to the success of your team. Ask the employee and their supervisor for specific examples of their contributions and achievements.
Compare: Research earnings for similar positions at companies within your industry. Stay competitive to keep your top performers.
Whatever your reason for granting or not granting a raise, be sure to explain to the employee why or why not. If it is a performance problem, tell them what they need to do to be eligible for future raises. If they deserve a raise, give their request some thoughtful consideration!
(Source: The Right Time for a Raise, Entrepreneur.com, By David Javitvh)
Did You Know
In a recent survey, Salary.com, found that 39 percent of employees would forego a $5,000 raise if they could have more time off to spend with their families.
Answer to Today's Dos and Don'ts
“Is this your maiden or married name?" Is it legal to ask?
This question could be seen as an inappropriate inquiry under Title VII of the Civil Rights Act because it indirectly asks a female applicant to disclose information regarding her marital status. To avoid potential discrimination it is best to avoid this question.
However, if your company has a policy to conduct background checks, you might be able to determine if a candidate has used other names in the past. You can obtain this information by having the candidate complete a background check authorization release form. Just be sure that you don't use this information in making a hiring decision.
Do you effectively compensate your employees? Don't wait until a star employee quits to find out. Take time now to review your compensation plan to make sure your valued employees are getting paid appropriately to accomplish what you want them to do!
Ann Clifford
Dos and Don'ts
Can you ask a candidate the following question?
"Is this your maiden or married name?"
(Answer provided at the end of the newsletter.)
Sales People-Go Forth and Sell a Lot!
"Go forth and sell!" Does this sales strategy create the results you desire? It might, if your sales people are paid on straight commission based on gross profit intended to drive them to the easiest, quickest, and most lucrative activity. But, what if you want your salespeople to open new accounts, promote certain product lines, or emphasize certain accounts that build market share? Dave Kahle, a sales compensation consultant, has a five-step process for designing a sales compensation plan that supports your long-term company goals:
Step 1: Develop a strategic plan. In other words, decide "what you want them to do." i.e., penetrate a new market, introduce a new product line, increase market share.(Source: "How to get 'em to do what you want 'em to", by Dave Kahle)
Step 2: Create a list of 3-10 most important sales behaviors that support your overall goals. i.e., cold calls, appointments, quotes.
Step 3: Define these behaviors in ways that are easily and accurately measurable. i.e., Generate X quotes per month from new prospects. Step 4: Measure and reward the behavior you want. i.e., post monthly sales #'s and pay them for reaching goals.
Step 5: Hold "accountability-holding, goal-setting, strategy-developing" quarterly or monthly meetings with your salespeople.
Compensations Components
An employee's compensation includes more than just base salary. When discussing compensation with employees, be sure to show them the total package. Below is a breakdown (as a % of total compensation) of the major components along with national percentages for each category.
(Source: "Bureau of Labor Statistics" www.bls.gov)
Are you prepared for this challenging question asked by an employee, "Can I have a raise?" Here are a few key things to consider that can guide you:
Why: Determine why they want or deserve a raise. Is this employee asking for a raise out of personal want or need? Does the employee feel like his or her contributions merit a higher salary? Will you lose this person if you do not give the raise?
Value: Objectively evaluate how this employee has contributed to the success of your team. Ask the employee and their supervisor for specific examples of their contributions and achievements.
Compare: Research earnings for similar positions at companies within your industry. Stay competitive to keep your top performers.
Whatever your reason for granting or not granting a raise, be sure to explain to the employee why or why not. If it is a performance problem, tell them what they need to do to be eligible for future raises. If they deserve a raise, give their request some thoughtful consideration!
(Source: The Right Time for a Raise, Entrepreneur.com, By David Javitvh)
In a recent survey, Salary.com, found that 39 percent of employees would forego a $5,000 raise if they could have more time off to spend with their families.
“Is this your maiden or married name?" Is it legal to ask?
This question could be seen as an inappropriate inquiry under Title VII of the Civil Rights Act because it indirectly asks a female applicant to disclose information regarding her marital status. To avoid potential discrimination it is best to avoid this question.
However, if your company has a policy to conduct background checks, you might be able to determine if a candidate has used other names in the past. You can obtain this information by having the candidate complete a background check authorization release form. Just be sure that you don't use this information in making a hiring decision.
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