6 Steps to Determine What to Pay an Employee

As a small business owner responsible for paying your own salary, you are most likely sensitive to the importance of satisfactory pay for a hard day’s work. You know that compensating your employees fairly and competitively is important to a positive and productive work environment, but how do you go about setting a pay scale?

For most small business owners, it’s not simply a matter of starting an employee at minimum wage. According to small business owners surveyed 81 percent pay above minimum wage and 66 percent support an increase in federal minimum wage.

What to pay an employee is generally based on a candidate’s experience, training and past salary. Use these six steps to determine a pay rate for new employees.

1. Write a job description

A job title isn’t enough. There are a wide range of jobs with the same title, and your small business environment likely requires specific talents and entails certain responsibilities. A clear idea of exactly what the position encompasses is necessary for determining pay. List all of the duties of the job, starting with the most important and moving down to less significant tasks.

2. Consider experience and training

Determine the minimum experience and education necessary for the position. If the job calls for prior training, note how many months/years are required. Also consider education. Does the position require an advanced degree or certification? Generally, the more training and education an employee has, the higher the pay.

3. Check out industry rates

Use your job description to compare industry rates. Do an online search on employment sites and compare pay rates of similar job descriptions in your geographic area. Ask an HR Consultant to benchmark your jobs in the same industry. Note the bottom of the pay scale, the top and the average.

4. Factor in benefits and perks

As best you can, determine the value in dollars of any healthcare coverage and retirement plans you offer, as well as opportunities like flextime, working from home, reduced workweeks and the use of company vehicles.

5. Set a salary range

Using all of the facts you’ve gathered regarding the position, determine a payment range. Start with the lowest salary you discovered for the position and offset that figure by the dollar value of benefits you offer. Then define that category with the lowest required education and training. Repeat the process for the next level.

A resulting starting salary pay scale might look like this:

  • $30,000 salary for 1-3 years of experience and no or limited education
  • $35,000 salary for 4-5 years of experience and a degree
  • $42,000 salary for 5+ years of experience and an advanced degree

6. Be flexible

Be willing to tweak your salary range, if necessary. For instance, if you find an employee who made $2,000 more a year than you’re offering, but the candidate looks especially promising, consider matching that pay, if your budget allows.

Offering potential employees a fair wage sets the stage for a happy work environment that’s bound to inspire productivity and encourage creativity.

2018 Compensation and Benefits Workshop

We are excited to host a half day workshop on October 3rd at Because Space for Life.

When employees feel satisfied and valued in their roles, they’ll be more engaged and motivated to work harder and deliver top results.

At the 2018 Comp & Benefits Workshop, HR thought leaders and experts will touch on aspects of Total Rewards – from compensation, to work-life effectiveness and benefits, including pay equity and paid time off. You’ll walk away with practical tips and new strategies to ultimately create breakthrough performance throughout your company.

Agenda

 7:30 – 8:15am Continental Breakfast, Registration, Network, Meet Vendors
 8:15 – 8:30am Welcome message
 8:30 – 10:00am How to Become a Compensation Nerd

 

Does compensation mystify you?  Well, you’re not alone.  Join your fellow generalists on a journey to understand compensation basics and some strategic approaches to forming your company’s pay practices. In this workshop you will learn:

·       The eight questions to answer before you start solving your compensation issues.

·       How to think about and use survey data

·       How to structure your base pay into grades and ranges

10:00 – 10:15am Break with Vendors
10:15 – 11:45am Winning at Total Rewards: How to HIGH FIVE your Total Rewards program!

 

A 90-minute tour of the FIVE Total Rewards components that will make your TR program successful.  In this workshop you will learn:

·       Review the foundation of Total Rewards and the FIVE key components that make up a great TR program

·       For each of the FIVE key components, a quick look at best practices and how to set up that part of your TR plan if you don’t already have it

·       Resources to help assist in the setup and maintenance of the FIVE key components

11:45 – 12:00pm Wrap Up, Raffle Prizes


Why Attend?

  • Evaluate your organization’s existing total rewards strategy using current trend information.
  • Discover new strategies to build a “Best Place to Work” culture that attracts and retains the best and brightest talent.
  • Determine how to influence your organization’s success by learning real-world and practical solutions to your top business and HR challenges.
  • Understand why engaging employees is the path to profitability and business growth and how to use employee engagement as the ultimate competitive advantage.
  • Develop an impactful total rewards strategy with help from peer insights and analytics and learn how to communicate your offerings, so employees understand the value.
  • Network with more than 150 HR professionals who are responsible for compensation and benefits plans and strategies.

 Meet Our Speakers

Gail Paul is the CEO of StrategiComp.  She has over 25 years of experience as both consultant and practitioner in the areas of compensation, executive compensation and benefits.

StrategiComp, formed in 2016, has many diverse publicly and privately funded clients from multiple industries.

Gail’s background includes serving as the top Total Rewards executive for publicly traded organizations Universal Technical Institute and Del Webb Corporation (Pulte Homes), where she was responsible for managing executive compensation programs, pay and incentive structures, equity incentive plans, and creating and communicating the compensation philosophy and strategies.

Gail has also worked as a Senior Consultant at Mercer H.R. Consulting / Mercer Health & Benefits, providing comprehensive HR and benefits consultation to large corporate and government clients in Arizona and Nevada. She was the founder and principle of Matrix Compensation & Benefits Consulting, where she crafted powerful compensation and total rewards strategies for a wide variety of clients, public, private, Fortune 500 and small firms.

Gail is a Certified Executive Compensation Professional through WorldatWork and is an active member.  In addition, Gail is a Predictive Index Certified Partner through MindWire Group where she serves as Vice President/Partner.

 

Sheila Krueger is a Total Rewards Expert with Televerde. Sheila M Krueger is what is referred to as a “seasoned” professional. Not only is she tender and juicy, she’s got over 20 years of practical and strategic experience in the Total Rewards arena. Starting with a stint selecting and installing an HRIS system (when she didn’t even know what HRIS stood for), to overseeing Total Rewards programs for companies of 200, 750, and 3500 employees, Sheila has heard all the stories and survived to tell the tales.

 

Meet Our Vendors

Edward Jones – Carina Burtell

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