HRO Today April 2016 - 39

Payroll
Approaches of Top Performers
Source: Payscale's 2016 Compensation Best Practices Report
idea that employees are easily replaced. By contrast, the
report found that top performing companies truly value
their people more and take their pay more seriously. Half
of top performing companies have a formal compensation
strategy in place compared to just 38 percent of average
performing companies. Additionally, 86 percent of these
top performers agreed with the statement " our people are
our greatest asset " versus 78 percent of other companies.
The message is simple: When you value your employees
more, you invest more time and energy in creating a
compensation strategy that ensures they feel recognized
and valued.
Typical compensation programs in place at most
companies are created by default, not design. PayScale's
research shows top performers flip this formula on its
head. These more successful companies realize in order to
recruit and retain top talent, they must have a competitive
compensation strategy as their foundation. But, many
companies don't know how to build a compensation
program that rewards those who make the biggest
contribution to the bottom line.
Similarly, the research reveals that top performing
companies also pay their employees more. In 2015, 90
percent of top companies gave pay raises compared to
84 percent of average ones. Similarly, 80 percent of top
performing companies gave bonuses in 2015, which is 6
percent higher than those offering bonuses at average
companies. Most bonuses are awarded to recognize
employee contribution to the bottom line, a practice that
is known as pay-for-performance. PayScale anticipates this
trend of offering performance-based pay will continue
in 2016, as half of all top performing companies are
increasing their bonus budgets this year.
2. Discussing pay with employees. Because top performing
companies respect their people more, they are more likely
to communicate openly and honestly with them about
pay. In fact, nearly half of these more successful companies
embrace transparent pay practices, as opposed to just 40
percent of other companies. While it can be a departure
from the traditional corporate veil over communication
around pay, a more transparent compensation policy
pays off. Another PayScale study of 71,000 employees
finds that 82 percent of employees would be more likely
to accept below-market pay as long as their employer
was straightforward with them about the rationale. This
underscores how important transparency is to ensuring
employees are happy with their compensation. Open
discussions can be transformative in the way employees
experience and perceive their pay. The importance
APRIL 2016 | www.hrotoday.com
[39]
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HRO Today April 2016

Table of Contents for the Digital Edition of HRO Today April 2016

HRO Today April 2016 - 1
HRO Today April 2016 - 2
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HRO Today April 2016 - 5
HRO Today April 2016 - 6
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