The balance of keeping an organization profitable is a fine juggling act. Most companies know the importance of fair compensation and valuing employees. The struggle often becomes, once that solid baseline is established, knowing when and why to give an employee a raise.
Here are five signs that might trigger the need to evaluate raises for employees.
You might consider giving your staff a pay increase if:
1. The organization experiences above-average profits. During such times, it is great to save away money or issue nice dividends to management, but don’t forget to share the love and success with your key staff as well. You can bet that talk around the water cooler involves how well the business is doing!
2. Staff turnover is 30% or more. While there are likely a number of reasons for such high turnover, it could be because your baseline isn’t as established as you thought. This might be a good time to gain factual information on how your operation measures up against other similar operations. AgCareers.com offers a tool that benchmarks salary data on a variety of industry specific roles, the Compensation Benchmark Review. Data has proven time and again that if staff can do the same work nearby for higher compensation, chances are they will hit the road!
3. You have staff that consistently gives 100%. When you get ‘A’ players and they produce, you need to figure out how to reward them, including financially. If you don’t, eventually they will get recruited away from you and then it will be too late.
4. You have select staff with invaluable skills. Whether it is a team member who is great at crunching numbers or an employee who can repair anything, it is important to ensure that staff who excel within the organization are paid fairly. Once again, if you don’t, they will be subject “bait” and swim away!
5. You have select staff that you think could do your job or take on other management roles one day. Succession planning is so important, no matter the size of your organization. If you have staff within your team that should be considered as potential leaders for the business, then it’s only appropriate that you keep them happy and loyal.
When it comes to effective compensation management, it boils down to having confidence that you are competitive in the market and knowing when to consider a pay increase for key staff members. While it’s not always about pay, EVERYONE wants to be fairly compensated for their work.
Editor’s Note: Erika Osmundson is director of marketing and communications for AgCareers.com. For more information on benchmarking your salaries within agriculture, contact email@example.com.