Employee Management

Employee Compensation Strategies for Employees

Getting Started
Managers face so many decisions every day, finding the time to structure and implement an equitable wage structure can be hard. To make the process easier, consider the following checklist:

  1. Decide what you want your compensation package to do.
    • Recruit new employees
    • Motivate current employees
    • Reward well-performing employees
    • Minimize risk of violating federal laws
    • Build employee loyalty
    • Any combination of the above
  2. Pick your compensation philosophy, either:
    • Job Evaluation
    • Employee Evaluation
    • Determine your internal wage structure.
    • Evaluate the jobs
    • Evaluate the employees
    • Create Competency Groupings
  3. Talk to your employees about their Indirect Compensation needs:
    • Health Insurance
    • Paid Vacation
    • Housing
    • Child Care
    • Retirement Planning
  4. Structure your Total Rewards System. Including:
    • Indirect Compensation (Based on your employee’s needs and your compensation objectives.)
    • Direct Compensation (Based on labor market information and your compensation objectives.)
  5. Implement your new system, remembering to:
    • Communicate with your employees about their needs
    • Review your compensation package regularly to make sure it is timely
    • Be flexible and innovative to maintain a competitive advantage

Successful managers rely heavily on common sense and the area of employee compensation should be no different. If you want your employees to be innovative—reward them for new ideas. If you want your employees to stay with you for long stretches of time instead of training new employees every season—offer bonuses or tie their wages to their tenure. If you need employees that show up on time, work hard, and can be trusted with the most challenging of tasks—recruit those people; reward those people; promote those people. The future of your business could depend on it.

 
Based on information from Employee Compensation Strategies for Agricultural Employees by Sarah L. Fogleman and the Kansas State University Research & Extension. http://www.agecon.ksu.edu/home/Research&Extension/risk%20and%20profit/archived%20papers/risk99/sfogleman.PDF