Make your compensation system competitive
When we look at surveys of employee happiness compensation is usually way down the list. The time where compensation becomes a higher issue is when employees feel they are being underpaid.
Not only do you want to have a base compensation system that is competitive, but you also want an incentive compensation portion that pays your key people when the business performs above expectations. Sharing the success in your business with your key people will help keep your people happy and productive.
Share financial information
We find that companies that share financial information have better performance than companies that keep their information private. Sharing information doesn’t mean sharing salaries; it means sharing the income, costs, and key ratios with your people.
Sharing information is just the first step. When you share information with your key people you can also use this information as the basis for putting a good incentive compensation and management system for controlling key driving numbers in your company.
Allow your people to control their work
Sharing information is part of this formula. Research also shows that when employees are allowed to plan and implement their own work they are more productive and much happier.
Most of the people who work with us no longer work on an assembly line. Allowing your people to control how they work makes sense, especially when you also give them specific targets they are responsible for achieving.
Having key performance indicators and understanding what drives the key numbers in your business allows you to monitor the effectiveness of your managers. My question is if your managers are producing the results you want, do you really care how they spend their time?
What is your promotion path?
If you have productive key people in your company you also need to have a path for promotion. Companies that think about continuing education and how their key people can grow will have key employees that think and know the company cares about them and their future.
Knowing that you think about the next step for your managers helps them feel valued and challenged. When you are clear with your people about what the next step is they have the ability to decide whether it’s something they want. Letting your key people know specifically what must be done for the next step allows more loyalty.
Use a stay bonus for triggering events
A stay bonus is an extra compensation plan that you have if a triggering event such as death of the owner or sale of the business happens. As you age, your key people wonder what will happen to them should you die, become disabled or sell the company.
A stay bonus allows you to have a written agreement that if one of those triggering events happens, they will get a specific bonus if they stay with the company and help the company get through the challenges that could be caused by a triggering event.