Here’s are Wudyka’s 9 top tips for 2011:
1. Reexamine Your Pay Program
The bad economy has produced a tremendous opportunity for us to improve our compensation plans, Wudyka says. For example, consider gainsharing, he suggests. It only pays out when company does better.
2. Reallocate Comp Dollars
Re-examine the way that you allocate comp program dollars, Wudyka suggests. For example, look at “cost shifting” between direct and indirect compensation.
3. Don’t Forget Benefit Plans
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Also take a close look at your benefit plans, he adds. Are they producing the effect you want? You want to make sure every dollar you spend is benefiting employees and benefiting the company.
4. Explore Low/Cost No Cost Strategies
Explore new recognition and non-monetary compensation strategies that are low cost/no cost but produce positive results. Some research suggests that the most liked non-cash reward is a simple letter from the CEO thanking the employee for a job well done.
5. Implement Pay-for-Performance
Consider pay-for-performance programs that are self-funding or that have “pay back” features. For example, skill-based pay, gainsharing, or goal-based plans.
6. Try Merit Bonuses
Use merit bonuses to stabilize your payroll until the recession subsides, says Wudyka. It’s a good way to give employees something tangible, without loading up the base salary and compounding over the years.
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7. Think Strategy
Make sure you’ve aligned your compensation plans with your organization’s strategic objectives. Be sure that the pay plan reinforces the goals of the company.
8. Get ready for a “new normal”
Get ready for the “new normal” in compensation. And be aware that normal can now can change very quickly! Wudyka says. Prepare yourself with multiple scenarios so whatever happens you can react quickly with a well-reasoned response.
9. Get into the Habit of Scanning
Especially in this economic environment, it’s important to stay on top of the very latest benchmark and trend data. If you don’t routinely track benchmark and trend data you can be whipsawed. Scanning—it’s a good habit to get into, says Wudyka.