The top concern of HR professionals today is how to manage an incredibly tight budget. Whenever we get in the 3% range for salary increase budgets, spreading it out becomes a challenge. The specifics of your industry, company financial condition, staff demographics and underlying pay systems will need to drive decisions for each organization. Here are some ways organizations are dealing with these challenges:
1) Provide a base pay increase only to those employees who took on significantly more responsibility in the past year.
2) Focus on the overall “employment deal” which includes non-cash elements such as flexible work schedules and great benefits.
3) Focus on the key employees and high performers.
4) Consider giving increases to entry-level staff rather than managers or highly paid individual contributors.
5) Consider providing small lump sum awards so there is no cumulative add-to-base cost increase.
“A” players still have the upper hand and they know it. In manufacturing you focus on the higher margin business. It’s the same with employees. Make sure you have a great “key employee” program in place that will help retain your top talent.
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