March, 2019 - Compensation is a tricky business. Overpaying employees can eat into funds that could be used for further investment or other growth-based tasks. On the other hand, underpaying can potentially make employees feel undervalued, and in the worst-case scenario, leave the company altogether. Finding a balance between employee satisfaction and balancing the budget is crucial — and it must be juggled while making sure compensation is fair within the industry and for the hire's education and experience level.
Finding a pattern, strategy or guidelines that can ensure compensation is not only fair, but also shows an employee that they are valued, is difficult to navigate. The Forbes Human Resources Council thus asked nine of its members to share their best strategies for deciding employee compensation.
New York-based AETHOS Managing Director Keith Kefgen commented: "Benchmarking against competition in the marketplace is the only sensible way of understanding fair levels of pay. How you pay and the mix of pay is an internal company decision. Start with a compensation philosophy that delineates how and why you pay team members the way you do. That internal compass will let employees know what you value and why. And, be transparent about pay."
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