How to build a kickass team part 2:   Compensation Plan

This month we are doing a vlog and blog series on How to build a kickass team! If you want to check out the video version of this blog be sure to check out our YouTube page. It includes awesome footage of our cross provincial trip to Calgary. The first part to building a kick-ass team is building a strong foundation. If you missed that one be sure to check it out! This time we are going to focus on compensation, everyone’s favourite part!

Compensation is challenging and you have to be really careful with it. So ultimately, what you need to do is make sure that you offer something that feels good and is right for your team. This means compensating them for the work that they are doing and to advance with them as you grow. Sometimes coming up with a compensation plan can feel like a mountain to overcome. But it’s really not that difficult, you are really just trying to come up with a plan that really pays for the hard work that people are doing. It will make sure that it motivates the right behaviour and performance and rewards those who are working hard.

Base pay is not enough

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Base pay is just not enough to motivate people to come onto your team and stay with you long, so you need to have something more. Benefits are expected. A good benefits package should be covering 80–100% of extended health and the dental piece should be quite competitive as well. It is completely acceptable for the employee to paying for a portion of the benefits plan. Though the dollar you put in as the organization provides greater value than if you were to just give the employee the cash.

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Non-cash incentives

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There are also lots of other things that you can do from a non-cash perspective if cash is tight. Those things can also help with culture building incentives. Some examples of those would be; beer Fridays, team off-sites, professional development, and goals training. Competitions within a team can also be motivating for your team. As long as you are using the competition to motivate the right things. If you are wanting to motivate teamwork among employees, then putting in place a competition where each employee has a goal to meet is not a going to create the atmosphere you want. Instead of working as team the employees are going to compete against each other so they meet their goal individually. It would be better to set a team goal so the team has to work together to achieve the goal.

Cash or cash equivalents

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For additional cash or cash equivalents there are some options. Commissions, bonus plans, profit share plans, stock options, tokens, product or product discounts are just a few. You could offer signing bonuses for key roles if you are having a hard time hiring for that role. Profit share plans are great because they aren’t a guarantee and you only have pay them out when the company is doing well. This motivates the employees to work hard to make the company successful. You do have to be careful if you are going to use equity such as stock options. This can be a tricky thing to offer to your employees. If, for whatever reason, your stock value drops, your employees have then lost money. This can upset your employees, decrease motivation and kill your culture.

Incentivize the right thing

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With any of these options you have to be careful on what people are being bonused on. If you aren’t doing it properly, then you could have a huge discrepancy among departments, team or segments of the business. You never want to have a team focusing on one area of the business and their manager focusing on a different area. This doesn’t motivate them to work together as a team. You really want to make sure that you are motivating all your teams towards the same area and the same goal. Also, you want to make sure that you aren’t rewarding weird behaviour by bonusing on the wrong thing.

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It’s really good when you are adding new people to the team or growing your team to think about your compensation package. It’s really competitive out there nowadays and base pay is just not enough. Everyone is after the culture feeling and the examples that we provided are great ways to ensure that you are giving that culture feeling. Even if you don’t have a lot of cash to play with.

If you need help with ensuring that you current compensation package is motivating your team in the way that you want them to, be sure to send us a message. We would love to nerd out with you on this.

By |2019-09-23T19:29:26+00:00April 10th, 2019|Human Resources|