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How to Structure Salary Packages

How to design and implement remuneration structures that work.

Juliet Pitman




Most small business owners find it difficult to structure remuneration packages that meet their organisation’s objectives and ensure that the company is able to retain key talent. Getting it right is critical. “The need for remuneration policy, strategy and systems to underpin business strategy has never been greater,” says Dr Mark Bussin, executive chairman of 21st Century Business and Pay Solutions.

“There is no such thing as the ‘best’ policy or strategy. There are so many different ways to determine remuneration and in different situations or circumstances, you may make different choices,” he says. He advises business owners to take several factors into account.

What To Consider

1. Organisation strategy.
In the same way that the vision and mission inform the strategic objectives of the company, so business objectives should inform the remuneration structure of the company. Also consider:

  • The extent to which you want a centralised or decentralised approach
  • The culture and design of the organisation

2. Where the organisation is in its lifecycle.
Industry and product growth rate and business lifecycle stage has a significant impact on remuneration strategy. For example, a company in the embryonic stage might place less emphasis on salary, benefits and perks, and more emphasis on share options and long-term incentives.

A more mature organisation might focus on ensuring salary and perks remain competitive, link bonuses to productivity improvement and have a reduced concern for long-term incentives.

3. Remuneration trends.
A trend is not necessarily best practice; but if more and more organisations are considering it, it may be  important in ensuring that your business’s remuneration is competitive.

4. Reward preferences by employees.
Different employees have different drivers and may have diverse reward preferences. A weekend away might be suitable for some, while others will prefer additional leave or pay.

Read Next: HR Dilemma: Disclosing Staff Salaries

Components of Remuneration

Traditionally there are four main components of remuneration – base pay; fringe benefits and perks; short- and medium-term incentives; and long-term incentives, but to these Bussin adds a fifth component – retention schemes.

“Every element of a remuneration system serves a purpose and it’s critical to understand what the organisation is trying to achieve with each,” he says.

1. Base salary.
This provides an employee with fair pay for a day’s work and should take into consideration the overall job requirements, accountability and complexity and diversity of the tasks required.

2. Fringe benefits and perks.
The purpose of these is to provide special payments and programmes that may set the organisation apart from its competitors.

3. Short- and medium-term incentives.  
These incentives are designed to get results and ensure successful execution of the business’s strategic plan.

4. Long-term incentives.
These are crucial for retaining employees and focus attention on the achievement of longer-term strategic imperatives.

5. Retention schemes.
This is often added when the long-term incentives are not in place or not working for some reason or another. When implementing a retention scheme you need to decide who it will benefit (scarce skills, for example). Most importantly, such a scheme needs to be underpinned by a robust business case.

Juliet Pitman is a features writer at Entrepreneur Magazine.

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How to Guides

3 Companies That Do Culture Right and What You Can Learn From Them (Infographic)

Looking to improve your company culture? Google, Pixar and Patagonia have found formulas that work.

Kim Lachance Shandrow



In-office meditation rooms, rock walls and nap pods are all cool, but there’s so much more to creating a winning company culture than providing gravy perks like these.

To us, company culture is more of a positive collective state of mind, a shared organisational outlook that brings out the best in your employees, reinforces your mission and rocks your common goals. It’s also the attitude, personality and heart and soul of a business. It values people over product.

Related: 5 Inexpensive Ways to Create a Company Culture Like Google’s

If your company culture is a soul-sucking drag – or, worse, outright toxic – chances are it’s not too late to turn it around, especially if you’re in a position to catalyse change. Even if only in your corner of cubicle land.

One of the first steps you can take is to examine the top notch cultures of some of today’s most successful companies. And, when you’re feeling brave, gently nudge the powers that be at your business to explore and hopefully emulate them, too.

Take Pixar, for example. The phenomenally successful digital animation studio is built upon a culture of exceptional creativity, innovation and imagination, but its secret sauce really lies in truly, deeply caring for employees and their well being, something it didn’t always do.

In his book Creativity, Inc.: Overcoming the Unseen Forces That Stand in the Way of True Inspiration (Random House, 2014), Pixar president Ed Catmull describes a terrifying crisis that forever altered the company’s once notoriously workaholic corporate culture.

When the company was hustling to complete Toy Story 2 on time, an overtired employee forgot his child inside of a sweltering car instead of bringing him to daycare (the infant fell unconscious but later recovered). It was a wake-up call. From that point on, Catmull dedicated himself to encouraging a company culture that puts employee health and happiness first, movie deadlines second.

For more on how Pixar  – and Google and Patagonia – foster company cultures that embrace balance, fun and freedom, all while still pushing productivity, check out the infographic from below. We won’t tell if you print it and put it up in the staff nap room.

Creating a corporate culture

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How to Guides

(Infographic)This Is How Millennials View Work

It’s no secret that “millennial” is a somewhat loaded term that comes with a fair amount of contradictory baggage.

Nina Zipkin




For every think piece that characterises that cohort (those born starting in 1981) as progressive, optimistic and innovative, there is one that describes them as sheltered, entitled and underemployed.

With millennials on track to make up 75 percent of the global workforce by 2025, a recent study by Bentley University in Waltham, Mass., explores the millennial approach to work. The study polled more than 1,000 U.S. individuals aged 18 to 34.

Related: Hello to You: The Millennial Women in the Workforce

While millennials are known to always be glued to their phones and devices, 51 percent surveyed prefer to talk with their co-workers face to face. (Only 19 percent said they like e-mail best and 14 percent prefer texting.) And they’re even willing to put restrictions on their social media time: 66 percent believe that employers should limit time spent on social media sites in order to get more done during the day.

They’re also more loyal than they’re given credit for. Eighty percent believe they will stay with four or fewer companies over the course of their career. Sixteen percent expect to stay with their current job for the rest of their working life.

For more about millennials’ opinions of employee loyalty and long-term goals, as well as the importance of health care and working for an ethical company, check out the infographic below and Bentley University’s study.


 Related: How do I encourage my employees to adopt lifelong learning?

This article was originally posted here on

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How to Guides

How to Prevent Burnout

Learn to recognise the signs of burnout and pull unmotivated employees out of their rut





Highly motivated employees are true assets to any organisation. They are productive, energetic, eager to take on additional responsibilities, and pleasant to be with and work with. Furthermore, they spread their enthusiasm and work ethic to others.

But every organisation, no matter what the industry or the size, also inevitably has non-performing, unmotivated, burning out – or burnt out – employees as well. Therefore, to increase success, every business owner needs to deal with this obstacle by identifying unmotivated employees and “turning them around”. But this isn’t as easy as it may seem, especially because as the employer, you can’t really “make” anyone be motivated!

Remember the old adage, “You can bring a horse to water, but you can’t make him drink”? That, in a nutshell, is true with people as well. You can’t motivate them if they don’t want to be motivated. But you’re the boss, so what can you do?

Firstly, you need to identify the signs of a person on the verge of burnout. Then you must create the atmosphere that encourages these non-performing employees to refresh and motivate themselves.

What are the signs of a lack of motivation or burnout? One of the key danger symptoms is a decrease in performance or productivity.

Now that you have eight symptoms of burnout or unmotivated behaviour and attitudes, observation is the first step. What else can you do to move the employee along and assist him or her in the process of self-motivation? Firstly, gather information from previous performance reviews and from other managers or supervisors. Determine if this situation is a trend or just a blip in performance. In either case, you need to intervene as follows:

1. Meet with the individual. Begin by asking the employee their perception of their performance or productivity. Then, based on your data and observations, share your specific views of the change in productivity and attitude.

2. Identify previous motivators. The best predictor of future behaviour is past behaviour. Determine which factors are no longer present and/or determine which ones no longer work as motivators.

3. Identify new motivators. Frederick Herzberg, whose writings of workplace psychology in the 1950s and ’60s is still heavily relied upon today, offers the following most commonly used and effective motivators:

  • First, identify areas where the individual can experience a sense of achievement, such as accomplishing a task, finishing a report, meeting with colleagues or creating new ideas.
  • Next, recognise and reward the individual for a job well done or work in progress. This form of positive feedback usually encourages increased performance, and therefore the individual receives even greater recognition or comment from you, the boss.
  • Provide opportunities for personal or professional growth on the job. This can be accomplished through attending seminars or workshops or by observing other employees in other jobs. In addition, by creating a concrete career pathway (a plan for future career growth), you can motivate this person to strive toward the next job or position in your organisation.
  • Ensure that you’re providing appropriate amounts of guidance and supervision so the employee knows exactly what’s expected. Also, ensure the communication between the two of you is frequent enough, appropriate and adequate to ensure the employee knows exactly what the road to success looks like. You might discover that the current job is too challenging or perhaps not challenging enough to maintain the person’s interest and productivity.
  • Try rotating or exchanging the job responsibilities between several employees. This form of cross-training injects fresh, new energy and challenges into the daily job performance.
  • Try expanding the breadth and depth of responsibilities. This too can energise the individual who is not feeling challenged.

Basically, all of these proven techniques serve to assist you and the employee in evaluating how well they fit into a current role. This is an easy and extremely effective way to increase employee motivation, job satisfaction and productivity. After all, isn’t this what you want from your employees?

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