Salary is a subject that is of primary concern for employees and employers alike. Setting a pay scale for your workers can be challenging. You want to pay your workers enough to compensate them for their time and prevent them from seeking employment elsewhere, but you don't want to pay so much that salaries eat into your company's profits.
Use these tips to create a pay scale that is fair for both you and your workers.
1. Determine the value of the position.
Before you can assign a salary to any position within your company, you need to determine the value of that position. Begin by drafting a comprehensive list of the responsibilities and duties the employee filling a specific position will need complete each day.
Consider the amount of time it would take you to do the work yourself. Take into account any special training, education, or certifications needed to complete the work associated with the position. This information can help you determine how valuable each employee is to your company. The salary scale for each position should reflect the total value.
2. Research comparable wages.
In order to attract the best employees to your company, you need to offer pay that is competitive with other businesses in the area. Once you have created a detailed job description, use this description to locate other positions that are similar to the one you are trying to fill.
Pay attention to the salary and benefits offered by your competitors. You can use the compensation package being offered by other companies for similar job openings to help you determine an appropriate pay scale for your own workers in the future.
3. Factor in non-salary compensation.
As you create a salary scale for positions within your company, factor in the value of any non-salary compensation that is associated with each position. Many companies offer their employees access to subsidized health insurance, stock options, quarterly bonuses, and reduced memberships to gyms or bulk-buy stores.
Each of these perks has value that can affect the salary you are willing to offer. The more non-salary compensation options you offer, the easier it will be to attract quality employees while maintaining a lower base pay. This benefits both your employees and your company by helping to satisfy the financial needs of both parties.
Creating a fair salary scale can be difficult. Be sure that you have clearly defined the positions within your company, that you know comparable wages being offered by competitors, and that you factor in the value of any non-salary compensation options available to your employees when setting a salary scale in the future. If you're still unsure of what salary to offer your employees, contact a local pay consulting company.