Growing a business isn’t a simple step-by-step process. It involves adaptability, intuition, and the ability to analyze patterns and trends in order to make informed predictions which will (ideally) lead to success. The factors leading to success can be grouped into two major categories: internal and external.
A compensation plan can’t really affect external factors like market trends, supply and demand, or other things which need to be in play for a business to be successful. However, as mentioned in an earlier blog post about how compensation management software fits in to the ideas of people, process, and product, internal factors are another story altogether.
People are necessary to carry out the process used by your business. And compensating them fairly can reduce their levels of stress, improving their performance. If your compensation plan allows your employees to stay worry-free concerning factors outside of the workplace (mortgages, health insurance, retirement, and so on) then they can spend more time focused on their jobs. Good employees are necessary for successfully growing a business.
Keeping with that theme, let’s talk about employee growth. One of the key factors to employee engagement is keeping them from feeling that their career is growing stagnant. People want to feel as though they’re making progress – if they feel as though they’ve reached the limit of what they can achieve at your organization, chances are they’ll be looking for the door pretty quickly.
It’s important for management to be able to recognize which employees are (or have the potential to be) key players within the organization, and to foster their talents in kind. Rewarding top performers, whether that be through promotions, merit increases, or so on, is one of the most significant ways a compensation plan can help grow your business from within. Money is a powerful motivator, but it goes deeper than just that. Rewarding your employees for their hard work and providing them recognition allows them to feel as though they’re making an impact within your organization. It also makes them feel like their contributions are valued, as are they.
One of the most powerful ways to get your employees invested in the growth of your business is –literally—investment. Offering employees company stock, whether as part of their salary or as a performance incentive, can be a powerful motivator. If the business is successful, then they’ll be able to reap the benefits, giving them further motivation to give their all for the company and help it grow as much as possible.
Compensation management can be a difficult thing to get exactly right, but with the right planning it can be a powerful tool to help grow your business from the inside. The right mix can go a long way in keeping your employees engaged, excited, and invested in the future of your business (which they can see is directly tied to their own futures). Without that engagement, it’s easy for your business to sink into stagnation – or worse. Effective compensation management is vital to growing and nurturing your business.