Fair Pay
A step-by-step plan for implementing an effective compensation plan.
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When it comes to ministry-related job positions, many people don't want to admit the importance of the compensation plan being offered, yet it remains a vitally important element in attracting and retaining qualified employees. For many managers, compensation systems remain shrouded in mystery. Here's how to implement a formalized pay and benefits plan.

What a Plan Does for You

A formalized pay plan makes good business sense because it allows an employer to:

  • Attract, hold, and motivate sufficient numbers of qualified employees to perform the work of the organization.
  • Control compensation costs so that they are neither too high nor too low.
  • Avoid charges of pay discrimination by disgruntled employees—an occurrence more common today than ever.
  • Assure that differences in pay from one job to another are equitable.
  • Assure that jobs requiring greater amounts of skill are, in fact, compensated more than jobs requiring lesser amounts of skill.
  • Reward employees objectively for meritorious performance.
  • Establish job sequences and lines of progression.
  • Improve morale by reducing the likelihood of friction and complaints over perceived compensation inequities.
  • Deal on a factual basis with compensation questions raised by employees.

A formalized compensation plan establishes an objective means for reaching decisions on pay. Moreover, it provides a sound basis for explaining those decisions to employees. The absence of a well thought-out pay plan usually leads to employee dissatisfaction, perceived inequities concerning pay, and ultimately to increased employee turnover.

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Posted: January 26, 2009

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