Why getting paid’s not just about the money – a four-dimensional approach
When someone says, "I love my job", they're not just referring to how much they're paid, but how their remuneration is structured. There are lots of names for it, but in the interests of simplicity, we just call it 'rem'. And it's a lot more complicated than some believe; if it weren't there'd be no need for HR experts managing the process.
Our new eBook, Money doesn't buy you happiness - or engaged employees, presents our ideas on building holistic remuneration strategies that work. 'Holistic' might sound a bit fluffy, but we've found that a multi-faceted approach to rem is key to success, and a lot more effective than sticking with a one-dimensional approach.
The eBook looks at four dimensions:
Dimension 1: Get philosophical
This dimension focuses on understanding the cost of employment, maximising your salary spend, the alignment of rem with your company’s strategic direction, and viewing rem as an element of your business’s success strategy. It's about looking at how much money you've actually got, and how that amount influences all those line manager decisions. It's more in-depth than simply dividing the pie though; it's about how your business approaches its financial strategy. It's about thinking more broadly.
Dimension 2: External relativity
No, it's not about Einstein's theory of relativity. It's about analysing and incorporating comparative market data into remuneration decisions, and how market and industry pressures impact on pay rates. Simply determining where a job fits on a scale of market relativities is not sufficient; you also need a mix of solid statistics and educated judgement.
Dimension 3: The tough balance of internal equity
This is about differentiating categories of staff based on job ‘size’, and building future internal capability with effective workforce planning. Your employees want to know that they’re paid fairly compared with their co-workers, and in comparison with the market, and that means implementing a system that benchmarks roles internally by establishing rem ranges.
Dimension 4: The individual
How much do you know about your employees? Do you understand what drives them to achieve, and what their expectations are? This dimension is about personal understanding, and making sure that your employees understand the process of how their rem is determined.
The eBook concludes with a useful rem strategy policy and template, to help your business implement this holistic, multi-dimensional approach to rem strategy.
Remember - it's not just about the money. It's about the many variables that need to be considered and balanced when developing your remuneration strategy.