Earlier in the year, PEO Advantage shared some tips for determining workplace salary grades (How Do I Determine What To Pay a New Employee?) But, once you’ve determined what to pay a new employee, that’s only half of the battle. Assuming you want to retain employees, you’ve got to provide them with something to look forward to or work towards – promotions and raises!
The following are standard types of increases and adjustments.
Merit Increase: A merit increase is a salary increase based on performance. Employees must meet or exceed preset business goals or performance criteria in order to receive an increase in pay.
Promotion: A promotion takes an existing employee and promotes them to a different position within the Company that often pays a higher salary and/or provides better benefits and perks.
Market Adjustments: Market adjustments do not have to do with performance but instead have to do with external conditions – market conditions to be precise. If an employer sees that Vice Presidents of Sales in similar companies make on average about $10,000 more each year than what they are paying their current employee, OR, the market is improving and the company is currently making more money than it has in the past, employers may increase the VP of Sales’ salary. This helps to strengthen employee satisfaction and retention.
One-time Incentive: A one-time incentive is a lump sum payment granted to recognize individual and/or department productivity. These can be given at any time and at any frequency over the course of a year.
Now, keep in mind that you can create a really competitive incentives program that combines two or more of the abovementioned salary increase opportunities. If you currently work with a PEO, be sure to run your ideas by them; PEOs are experts in attracting and retaining top talent – they help make sure the right talent is hired and stays put.
For more information on pay grades, payroll, or PEOs, contact PEO Advantage today.