According to a Glassdoor Survey, it was found that 45% of hiring decision makers note that salary is the top reason for employees changing jobs, followed by career advancement opportunities, benefits and location. Additionally, while there are obvious impacts of how compensation effects employees, most recently it has been linked to how people feel motivation at work. Scientists who have done extensive research have found that compensation is a supporting factor for overall motivation in the workplace.
Furthermore, they break it down into two elements: compensation fairness and compensation satisfaction.
Compensation fairness is when employees feel that their pay accurately reflects the quality of their work. The perception of a fair compensation package likely depends on a number of factors including the skills and responsibilities required for the job, the time and effort put in, as well as how the pay and benefits compare to what others receive for similar work.
Importantly, compensation fairness doesn’t necessarily mean employees will be paid equally, but it does require that any differences in compensation reflect real differences in employees’ skills, responsibilities and/or effort at work.
Compensation satisfaction reflects your perception of two critical aspects of compensation. First, that you are satisfied with your pay rate or salary, and second, that the company takes care of you by providing adequate benefits such as health insurance, retirement savings plans and bonuses. Compensation satisfaction plays a critical role in employee retention and satisfaction.
If you are a manager looking for ways to ensure your team feels satisfied and fulfilled with their compensation, or you are an individual curious how you can improve your own satisfaction, below are some recommendations to get you started.
First, check with your HR department to educate yourself on options for financial support and wellness programs that you and your team may be missing out on. Acknowledge employees for doing a good job and let them know which tasks specifically link to their progression – even a simple head nod can work wonders. Also, the onboarding process for new employees can feel hectic and overwhelming. Follow up with this group regularly in the first few weeks to ensure they have all the information needed to make the best decisions for their benefits. Last, make sure your employees understand their pay structure and the steps required for advancement.
Salary plays a critical role in employee retention and satisfaction, and getting paid is fundamental to work. How satisfied we are with our compensation, whether we feel the compensation policies in our work are fair, both contribute to how engaged and motivated we are in the workplace.
Whether you are trying to negotiate your salary with your current employer or during a job search; it’s essential to first understand what a fair compensation would be for your role and level of expertise. The first step in calculating your pay is to determine what your experience, knowledge and skill set is worth in the current job market. This is called salary benchmarking. This is the process by which internal job descriptions are matched to external jobs with similar responsibilities to identify the market rate for each position.
It might be difficult to make an assessment on what you’re worth all on your own – but don’t fret! We’ve listed four resources below that will help determine what an appropriate compensation package would look like for you.
SALARY CALCULATOR – GLASSDOOR’S KNOW YOUR WORTH: Receive a custom salary estimate based on your title, company, location and experience.
PAYSCALE: This platform goes through all your benefits, who you manage and your responsibilities before it gives you a number.
SALARY.COM SALARY TOOL: Millions of individuals and the world’s largest brands rely on Salary.com for the most accurate compensation data, resources and expertise.
LINKEDIN SALARY: Calls upon its network of more than 460 million plus members to provide compensation insights.
Once you’re sure that you understand your worth, it’s time to leverage your findings!