Is Your Lack of Pay Structure Demotivating Employees?

Salaries are the driving force for many in the workplace, especially in the current economy where the cost of living is always increasing and the job market is highly competitive, leading to many people finding themselves in jobs they wouldn’t normally choose. While pay is often the motivating factor for many to turn up on time and do their job, the pay structure you have in place in your company could be one of the leading demotivating factors for your staff. You’ll still get everyone turning up everyday but if staff believe they are being paid unfairly compared to their colleagues or below the industry average. These staff are more likely to perform to their lowest ability, simply ticking boxes without truly enjoying or applying effort to their work.

If you are worried that your staff-force aren’t applying themselves and want to motivate them to be more productive and efficient in their work and before you start handing out disciplinaries, take a step back and reassess your current pay structure or carry out an equal pay audit.

Do You Have a Pay Structure in Place?

The first step is to implement a pay structure if you don’t already have one, not only does this make it easier to deal with requests for pay rises but it makes it easier to pay within or above the industry average. Depending on the number of employees you have and how responsibilities are divided in your workplace will affect the type of pay structure you choose. Here are some examples of popular pay structures that are utilised across numerous industries;

  • Individual Pay Ranges
  • An individual pay range is a set minimum and maximum that an employee can earn within their set job role. Employees are hired at the low end of the scale with the understanding that they will be rewarded for showing value, quality work and loyalty with a movement up the pay range. Pay ranges can be set against individual job titles so that a person changing job roles within a company can simply be moved onto the appropriate pay range.

  • Broadbanding
  • Broadbanding is a similar pay structure to individual pay ranges but instead of applying to individual job roles, apply to a tier level of responsibilities, for example, non-managerial job roles, manager job roles and executive level job roles. Broadbanding pay structures are advantageous for large companies with a large amount of varying job roles but have a similar level of responsibilities in each.

    While broadbanding makes it easier for staff to change around responsibilities within a pay band, it can lead to employees feeling unappreciated if they are moved into a more challenging role but are not offered any salary compensation due to falling in the same bracket. Similarly, as broadbanding incorporates a reward for loyalty, pay ranges need to be carefully monitored to ensure long-standing staff do not exceed the industry standard pay for a basic level of responsibility.

  • Job Families
  • Job families use a combination of pay structure elements to provide an overall strategy to businesses looking to offer fully transparent pay scales. First, jobs are grouped depending on their required knowledge and responsibilities, then a pay scale is given to this job family based on the experience and seniority. As staff progress in their knowledge and skills and show ongoing loyalty to the company, they move gradually up the job family pay scale. It’s easy to move staff within job roles within a job family and pay scales for individual job families can be assessed and amended without affecting the rest of the company’s job family pay structures.

    Remember to talk to your staff about their pay expectations. Honest, hard-working staff don’t want to take their employers for a ride but simply receive suitable remuneration for their work efforts. That’s why it’s important to be fully transparent with your staff to get the best response and levels of productivity, should staff find out that someone who works less than them receives a greater pay amount, you’ll soon see an increased staff turnover and poor work ethics. We all must work to live and most of us spend a huge amount of our time in our jobs so it’s important that everyone is compensated appropriately and there is a mutual appreciation between employees and their employers.

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