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But. . . We already pay competitive wages!
You've read your business would like ads and hear the tone of his recruitment, offering competitive salaries to qualified candidates. This must be a strong hook to attract talent, right?
Big deal.
Updated your structures based on market trends in compensation, so that the opportunities offered to employees should support their retention strategies and motivation, right?
Not enough.
I guess the majority of employees in your company already does, or who aspire to achieve the goal of a competitive salary. After all, business practices common to announce the candidates ( "We offer a competitive salary") and expect to rise to potential employers. But what happens when its goal to offer a competitive salary is finally reached? Are employees satisfied and content? Companies can pause in their efforts to attract, motivate and retain?
I'm afraid not.
When in a situation where does not pay the price "means the management of the fervent hope that the problems of employees and criticism will disappear once they reach this elusive goal. I say difficult because there is only an illusion, but a costly problem if you have a large mass of underpaid workers. And once you climb that mountain, too. . . So what?
This does not occur when offering a competitive salary, is that their recruitment problems have not disappeared by magic, your employees will not be affected and the compensation program has done nothing more than being average - not a "C" class at school? Is this where you want to be? Is a practice that ensures that employees are happy to stay with you? As aspirations go, only half of the road. You will find that this is not an advantage of pay the price, but certainly a disadvantage if they do not.
Even if your company does not pay "or standard rate or the average of the competition (the survey data), which means that approx. 50% of companies here are paying * more than you. That's what brings you mean, with half make more and half earn less. Is this what your company aspires to achieve?
Remember, no one leaves your company less money - to hear all of their employees on how it is and is making more money elsewhere. And, of course, employees hear only what supports their own ideas - not to pay attention to any package price, only data points that confirm their view that his company did not pay enough attention.
The only way to avoid this situation is that if you are a business leader paying markets / industry - and who can pay this cost?
Let us forget, it is important to distinguish between having a structure Pay (grades, salary ranges and the environment) that offers more competitive prices "opportunity" and actually pay employees these rates. Some might describe it as if the company is "walking the talk". I remember one client who was proud of the fact that their points median salary range is constantly adjusted to reflect market rates, but later was embarrassed to discover that their compensation practices actually delivered wage levels well below their media publication. However, it serves to explain the rate of rotation high and low morale.
For its part, employees are what they are paid, not the midpoint of a salary scale or another declared "opportunity". For them, the Company believes that the "competitiveness" is more illusion than reality especially if you are experienced and have been with you for a while. Thus, society needs to maintain its focus on the real wage vs. opportunity pay.
Why do not employers pay rate "go"? Normally, this is not a strategy but a set of practices that have evolved over time.
 · Some candidates accepting a lower rate than they would normally be paid for their expertise, and managers tend to see this news as good and cost savings. Although it is more like putting a skeleton in the closet and hope that does not scare you on the road. One day, these same employees change their minds.
 • Once you've started down the slippery slope to pay certain employees at below market rates established soon compounded by the well-intentioned practice of equity Internal. Managers do not want to pay people equally qualified new employees to existing courses for new employees are offered or pay lower market or improperly placed in high-value jobs for more money (a different problem in another article).
· A fee-for-performance systems have difficulty keeping up with the increasing commercialization of employees. A minimally qualified employee hired at the minimum rate will to acquire knowledge and experience (and therefore marketable) faster than the merit system of an annual business can recognize. This situation is compounded when you hire a skilled worker to note that the market requires you to pay more than you pay your employees more experienced.
So what's the answer? You may not get to a management agreement to become the main contributor to the region, then you should consider injecting some flexibility in its compensation practices. I mean that you should consider targeting certain key positions in his organization (highly skilled, difficult to replace, etc.) and ensure that employees of highly paid positions in the market.
Other positions that are not as skilled and easily replaceable You could continue with the chance of a "competition" strategy. Any damage who could not change the applecart. This approach is similar to the delimitation of its key talent, protection while recognizing the poaching / reward which have the greatest potential impact on your business.
So be careful when they say with pride how his company offers competitive wages. You Can not be correct, and if so - big deal.
With over 30 years experience Chuck Csizmar is an independent Global Compensation Consultant with deep and broad experience in the design, implementation and communication of domestic and international compensation and reward programs. He is the Founder of CMC Compensation Group, providing companies in multiple industries with the compensation expertise necessary to ensure business success in a challenging but resource-limited environment.
For a personal touch in an impersonal world you are invited to contact http://www.cmccompensationgroup.com.
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