Compensation is More Than Just a Pay Cheque

Compensation is given in financial rewards that are either direct or indirect:

DIRECT

• Wages and salaries
• Incentives
• Bonuses and commissions
• Stock options

INDIRECT

• Benefits
• Income protection programs such as Employment Insurance, Canadian Pension Plans and Workers Compensation.

Indirect benefits are costly to you, and their value should be communicated and acknowledged when discussing the compensation you offer.

When developing your business’s total compensation program, including program design, guidelines and procedures, it is important to understand and therefore include what is important to your business and its objectives. Consider creating a combination or variety of elements in your compensation program in accordance with your employee demographic and budgetary constraints.. This means trying to include the following:

• The different elements that will comprise the total compensation your business offers to its employees
• Compensation rates that are comparable or competitive within the industry
• Compensation that is internally fair; meaning, that there is a logical increase in pay based on things like length of service, job performed, or the skills or abilities required to successfully complete the job
• Established criteria that result in a pay increase
• A means of measuring and controlling your payroll costs
• A means of measuring the success of your compensation program. For example, being able to determine how competitive your compensation is in relation to similar businesses, and whether it accomplishes targeted outcomes of retention, performance and motivation.

THE OBJECTIVE OF COMPENSATION:

• Attract employees
• Meet legal requirements
• Retain valued employees
• Motivate performance
• Motivate personal growth
• Sustain high morale

It is essential to realize the importance of compensation and the flexibility you and your business have in creating a more customized compensation package. This in turn will promote the attraction, retention and development of quality people.

go2HR is BC’s tourism and hospitality , human resources and health & safety association driving strong workforces and safe workplaces that deliver world class tourism and hospitality experiences in British Columbia. Follow us on LinkedIn or reach out to our team.