The term “compensation” refers to the combination of wages, salaries and benefits an employee receives in exchange for labor. A total compensation package can have a couple of parts. An “employee compensation plan” collectively refers to all the components in addition to the manner in which the compensation is paid and for what purpose employees receive case bonuses, salary increases and incentives.
Here is the bottom line, what you pay employees will help set the tone either long-term employee satisfaction or disappointment.
If your company under or over pays your new employees, you run the risk of losing good talent or creating employees who expect more than they have earned. But having a strategic compensation plan will have the opposite result!
What about Employee Benefit Plans? Many business owners are convinced they cannot afford to offer benefits. But while going without benefits may save you some money in the short term, but may impede your business’s chances for long-term prosperity. As you most companies move out of the startup phase, their need for specialized, experienced and most importantly a productive staff becomes vital to the company’s survival. Research shows that when employees feel their benefits needs are satisfied, they’re more productive.
What is the long term benefit we mentioned before? By offering the right benefit programs, you may just jump-start your business growth. By giving your employees the benefits they value, and they’ll be more satisfied, miss fewer workdays, be less likely to quit, and have higher commitment to meeting the company goals
Recommended Benefit Programs
- Insurance (Medical, Dental, Vision, Life)
- Paid Time Off (Vacation, Sick or Personal Time)
- Retirement Plan
- Tuition Reimbursement (Educational Assistance)
- Employee Rewards (for employees who go above and beyond)
- Referral Program
- Workers Compensation (mandatory)
- Leave of Absences (mandatory)
Word of Caution: Complications quickly arise as soon as business begins offering benefits, however. That’s because key benefits such as health insurance and retirement plans fall under government scrutiny, and it is very easy to make mistakes in setting up a benefits plan. That is why we recommend working with Insurance Agents, they are skilled and knowledgeable about state and federal laws and the best part is that they get paid through the insurance companies, so their services and advice are free to you! (see Guide to Insurance Brokers for more Info)