What We Would Teach Ebeneezer Scrooge About Compensation
“Bah, humbug! Why should I pay my people another dime?”
Beware, Managers, don't follow Scrooge’s miserly ways when it comes to compensation. As the classic tale goes, through various ghostly visits, our friend Mr. Scrooge learns to get into the holiday spirit and finally rewards his hardworking employee, Bob Cratchit, with a raise and a "discussion of his affairs." How would PayScale advise Scrooge to adjust his compensation philosophy for long-term success?
Here are a few compensation tips for Mr. Scrooge and miserly managers everywhere to keep the spirit all year long. S – Strategize –
Think big Mr. Scrooge. What are you trying to accomplish with your compensation plan? No one likes to spend money without good reason, but when you decide what you want to reward (performance, tenure, innovation, etc.), you’re closer to having a solid compensation philosophy. P – Plan –
Though your business plan seems to be to prey on the poor (that needs rethinking), you still ought to connect it to your compensation plan, Mr. S. A solid compensation strategy will operationalize your compensation philosophy and connect with your (cruel) business goals. Know your market and your position relative to it. How will you determine your base pay structure? How about pay for performance? I - Innovate –
It’s time to join the 21st Century, Ebenezer. People are doing some pretty neat things with compensation these days
. The era of stable salaries and pensions is over. Things that attract and motivate millennial employees may not cost money at all – flexible hours, work at home, ownership of a special project, or any number of non-monetary benefits and perks. R – Research –
How will you know which approach to compensation works? I see your inner skeptic beginning to resurface, Mr. Scrooge. Do your research to see what other companies are doing. Give your friends at PayScale a call. Talk with your employees to see what they find motivating.
Consider piloting a compensation program with a smaller subset of managers (once your business grows and you hire some). This can help you get your managers engaged in the program, as well as allow you time to iron out the details with a smaller subset of staff. Keep in mind that it’s easier to give an extra bonus at the end of the year than it is to take money back. I – Invest –
Remember the visits from the ghosts, Ebenezer? Keep your heart warm and know that it’s never too late to invest in your staff. With a solid, well-designed and implemented compensation program, you’ll find that a small investment in your human resources will provide great returns in both productivity and profits. T – Train –
Train your managers, Mr. Scrooge. You need not be the only one watching your pennies. If you share your philosophy and give your managers the tools, training, and right motivation, they’ll be happy to help you make your profits grow.
With these tips, not only should you avoid those rattling chains and visits from your old business partner Jacob Marley, you’ll stay in the holiday spirit all year long and your employees will, too.
Compensation Consultant PayScale, Inc.
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