5 Things to Know About Compensation

Read time: 2 min

Keywords: Compensation, communication, market

At the surface level, compensation is often narrowed down to two main topics: how much is it and when is it available. In reality, there are several additional factors to consider when discussing compensation at any level in your company. 

1. Pay Equity. 

This ensures those performing the same job throughout the company are receiving similar compensation, which is referred to as a controlled pay equity analysis. This encourages fairness based on gender, race, ethnicity, and age. According to Forbes, state and local governments are addressing pay equity laws through pay transparency, salary history bans, and pay equity studies. You can also reference tools, such as Littler, to gain insight into pay equity laws. 

2. Market Influences.

As the job market is ever shifting, you need to evaluate how roles within your company are following suit. Job titles and expectations are being redefined and technology is evolving, so review your job levels and descriptions to align with the market. If you want to attract and retain the top talent, research the market and evaluate how your pay structure compares. 

3. Location Matters. (Sometimes)

Location-based salaries are designed to reflect the cost of labor and location. This means an employee working in San Jose may have a higher salary than one based in North Carolina with the same role. Fast Company interviewed several professionals from the field to gauge the positives and negatives for the affects location-based pay has on morale. 

4. Indirect Compensation.

Rewards and perks can go a long way with employees. Be sure you’re communicating and sharing what they are. Doing so in a timely manner can influence retention and motivation. Staples Worklife Magazine published a study to identify which incentives employees truly care about. Use these findings paired with your company survey to determine which programs are best for your employees. Use these findings paired with your company survey to determine which programs are best for your employees. 

5. Clear Communication.

Enable greater understanding with your employees with clear and frequent communication about compensation, rewards, and promotions. It’s important to communicate timelines and how potential increases are determined, whether merit-based or industry influences. These conversations offer a great opportunity to share resources to support professional development and reflect how the company is listening and adapting in the competitive landscape.