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The Salary Dilemma: Should You Be Open About Employee Pay?

Should your company’s salary information be transparent?

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Salary-Dilemmas

When you start a new business and have just one or two employees, it’s both easy and practical to make salary decisions on a case-by-case basis. As your business grows, however, this approach likely will cause staff to speculate, often inaccurately, and gossip about who earns how much. This dynamic can distract them from doing their jobs.

In an effort to avoid such fallout, some entrepreneurs make all their employees’ salary information available to everyone in the company. At the other end of the spectrum are those business owners who think this approach is completely crazy.

So who’s right? Should your company’s salary information be transparent? In my experience, many entrepreneurs debating transparency don’t see the underlying issues.

When you look at employee complaints about salary, they usually stem from at least one of the following three core issues:

  • Employees perceive salary decisions as arbitrary and presume they’re unfair.
  • Employees view their performance differently than you do.
  • Employees are confused about how the performance and compensation system works.

Here are three ways to address these issues:

1. Develop a salary formula.

Stop making case-by-case salary decisions. Instead, define every job in the company and develop a salary formula for each one. To eliminate any perception of arbitrariness, the formula should take into account factors like an employee’s skills, experience level and performance.

For example, say the salary range for a customer service agent is $20 000 to $30 000. An employee with average skills, experience and performance would earn $25 000. You can then rate the employee on a scale of -10 to +10. For example, if the employee had no experience, they would receive a -10 for experience. The combination of these ratings would then determine where in the salary range the employee falls.

With this formula, employees will stop asking “Why does Mary earn more than me?” and start asking “What do I need to do to become a senior customer service agent like Mary?” Instead of complaining about seemingly arbitrary salary decisions, employees will focus on improving their skills to earn more. It’s a subtle, but important distinction.

2. Regularly tell employees where they stand.

Every job in the company should have a written set of objective performance expectations. Employees should know how their performance compares to those standards. In addition to an annual formal review, it’s critical to provide frequent informal feedback.

Let me illustrate this point with a personal example on a smaller scale. I have three daughters under the age of nine and they all have “jobs” (household chores) around the house. If I gave them feedback on their “job performance” only once a year, they certainly wouldn’t keep up with their chores. While employees don’t need the hourly feedback my kids seem to need, a single annual review just isn’t enough.

When you provide frequent performance feedback – say, monthly – employees have no reason to be resentful about salaries because you give them ample time and guidance to improve. Conversely, when you tell an employee on 31 December that he or she has been doing a bad job since 1 February and, as a result, won’t be getting a raise, expect him or her to be rightfully resentful.

3. Educate employees on your performance and compensation system.

Once you’ve adopted a systematic performance and compensation system, communicate it to all employees, department by department – even if employees don’t (or are afraid to) ask about it. In a department-wide meeting, explain the hierarchy of job titles, the skills needed to qualify for each level and the performance criteria for each job level. (Also be sure to include the same information in materials for new employees.)

For example, you might announce that the customer service department now has only two job titles – Customer Service Agent, and Senior Customer Service Agent. To qualify for the latter, one must have mastered computers systems X, Y and Z; be certified on product lines A & B; and have a quality rating of 9+ for the last two years.

Before the new system goes into effect, give each employee a “sneak preview” performance and compensation review, based on the new guidelines.

This gives everyone a chance to get used to the new system and to identify any conflicts without salary changes at stake.

Once you’ve followed these three steps, you’ll have an objective, systematic and well-communicated approach to inform your company’s performance and salary decisions. At that point, whether or not you make salaries transparent will be a moot point because you’ll have effectively eliminated the underlying issues.

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Managing Staff

How The Digital World Has Impacted HR

Here are a few ways in which HR has changed.

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Almost every conversation that happens within a business environment is around growth and how technology is changing the way we do business. With few industries left untouched, the digital world has radically changed the way individuals work, creating an even bigger demand for real-time experiences.

The HR department deals with an influx of messages and emails on a daily basis, so in order to make things easier, digital has introduced a variety of different online tools that have certainly helped set the tone for the future of organisational management. With employee cultures, engagement and productivity being a few of the most important topics circulated internally, HR has a fundamental part to play in getting existing employees to adopt a digital mindset that supports this new-age culture.

The quicker businesses take advantage of technology to manage performance, make the hiring process easier and give people access to their own personal information, the quicker it will separate traditional workplace thinking from today’s thinking.

Here are a few ways in which HR has changed:

Cloud computing and online apps

With previous admin and other HR tasks being done by hand, cloud computing has now made everything faster and simpler. Professionals now have access to the latest online tools that will help streamline processes and allow individuals instant access to their own personal information without having to ask for it. This also speeds up the process and takes a lot of extra, unnecessary work off HRs shoulders.

Related: Is Leveraging Your Resources Getting The Job Done Properly?

In the upcoming years, companies can expect cloud-based HR systems to become more automated and mobile friendly. This means that HR and management will be able to access employee payrolls, CV applications and more, with just the click of a button.

People analytics

One of the many benefits that digital has created for HR is the availability of employee data. More companies have started using online applications to monitor employee performance and company productivity. HR departments have started tracking employee behaviour and patterns through their selected app, making employee feedback easier and more efficient. If any employees have complaints, questions or queries, logging these requests online will make it easier for HR to deal with, considering the amount of content they receive, every day. This will also help them to make more effective decisions.

It’s no secret that a company’s most valuable asset is their people, and when looking to motivate employees, track employee training and individual performance or set up a training programme, then online is the way to go. By having a more holistic understanding of your people and how they’re performing, HR can better support a culture of feedback, engagement and motivation. This kind of approach will also enable employees to better align their personal goals to bigger business objectives.

Real-time feedback

Because the digital age has created the impression that things can get done quickly, in real-time, employees feel the need to give and receive feedback with an instant response. Real-time evaluation is much more effective for something that needs to change than an annual or quarterly review would be.

If new procedures, policies, meetings or activities get announced, employees can immediately give their feedback on a specific topic or outcome. This will also help you know when to make changes both within the organisation and with employees. For example, employees who don’t measure up to their KPI standards can be subjected to additional training or can be let go in favour of someone else who can come in and do the job better than they do.

Related: What Happened To The Workplace? How To Make It More Human

AI, VR and AR

Gone are the days where robots, VR and AR were simply jargon used among tech geeks. These terms have officially made it to everyday conversations, between business owners, employees and HR leaders. Virtual Reality (VR) which can be identified as a recreation of reality, is now being harnessed by companies in their training activities, as well as Augmented Reality (AR) which enhances technology. These elements are starting to become far more integrated into internal activities, helping employers engage better with employees, making activities more interactive and fun.

While many advancements have been made to the HR department and even HR management courses at colleges, there are countless others to look forward to. New tech innovations are introduced every day, creating even greater opportunities for businesses to align their goals with HR.

Professionals will need to keep up to date with the latest trends and develop their own strategies to stay within the path of progress. Much like all things digital, we all have mixed emotions when it comes to new trends but in order for companies to stay relevant, they will need to adapt their company goals to meet these challenges. Technology is only going to keep moving forward.

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Managing Staff

A Culture Of Discipline Critical For SMMEs To Thrive

Employees are the heart and soul of every organisation, especially for Small, Medium and Micro Enterprises (SMMEs).

Thabang Rapuleng

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Employees are the heart and soul of every organisation, especially for Small, Medium and Micro Enterprises (SMMEs). As a result, the implementation, as well as enforcement of clear workplace policies and practices is critical to the success of these companies.

With South African Labour Law as strict as it is, we are still finding a significant number of SMMEs that do not have any formal policies and procedures, which increases the risk of these companies not complying with labour laws.

This is often as a result of SMMEs not having the necessary manpower or finances to have fully-fledged human resources (HR) departments. It can therefore be a common occurrence to find SMME owners at the helm of HR divisions.

An owner-run HR department will also not necessarily be overly familiar with labour laws. The company will often do something that is “good for business” but not advisable in terms of the law. This could lead to poor decisions being made and could be detrimental to the future of the company.

Related: 3 Steps To Find And Keep Top Talent In Your Business

Poor communication of policies and procedures is another area of concern for many SMMEs, resulting in employees often being unaware of HR policies and making them likely to infringe on these policies. New employees may also find it difficult to adapt to the business and employees could end up losing what could have been a valuable asset to a growing business.

A culture of discipline is essential

Discipline with regards to the enforcement of policies must be considered as a day-to-day management function, rather than a once-off or ad hoc event. This approach will ensure an issue is resolved before it spirals out of control.

For example, if an employee takes an extended lunch break, and the employer allows it to happen, it will send a message to other employees that this is perfectly acceptable. Employers will soon find other employees adopting a similar approach, possibly resulting in a large-scale disciplinary process. If the employer took the time and initiated a disciplinary discussion with the one employee, it would have communicated to other staff that this type of behaviour is not tolerated, avoiding a potentially bigger issue.

This is not just an issue in SMMEs. CDH often finds large corporates also struggling to maintain discipline on a day-to-day basis. In some cases, corporates tend to wait until an employee has made a significant mistake or serious act of negligence before intervening.

Record-keeping is your ally

Keeping a record of all disciplinary matters is an essential part of creating a culture of discipline in the workplace. It is critical that all verbal and written warnings are recorded and kept in the employee’s file.

Related: Servant Leadership – Will You Serve?

Under South African Labour Law, an employee must always be allowed to state his/her case in all disciplinary matters, irrespective of the seriousness of the infringement.

Before the employer issues a verbal or written warning, the employer must notify the employee of his/her infringement. The employees must then be given the opportunity to state their case and if the employer is not satisfied with their explanation, the employer may then legally issue the warning.

For more serious matters, which verbal or written warnings will not solve, you must follow more formal steps, such as disciplinary hearings. However, if you maintain a culture of discipline on a daily basis, you will rarely have issues escalating to such a degree.

Correcting an overall workplace culture is far more difficult than rectifying a small incident. When an employer has to correct an entire culture that is deeply entrenched in their business, the process can be more expensive and take much longer.

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8 Ways To Upskill Your Call Centre Team Before Year-End

For South African call centres, November is the busiest month of the year, so to get in on the action, it’s only appropriate for Olico to provide a few tips on how to upskill your call centre agents.

Gareth Moutain

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As we’re heading into the 2017 home-stretch, many companies will be concerned about hitting those final sales figures. Apart from being a tough year financially, traditionally sales tend to lag behind at this stage. But there is hope.

For South African call centres, November is the busiest month of the year, so to get in on the action, it’s only appropriate for Olico to provide a few tips on how to upskill your call centre agents.

1. For sales, balance is key

A firmly held belief is that the more leads allocated per seat, the more sales that seat will bring in. That’s incorrect. Give the agent too many leads, and they will give up too easily on a call, stopping at the first hurdle experienced. Too few leads mean they might miss out on sales opportunities. Finding the right balance is essential, bearing in mind that all leads should be made the most of.

2. Improve the opening script

In a call centre environment, agents must know how to capitalise on that brief period of time to get a foot in the door. The opening script is absolutely vital, and it can be enhanced by simply adding personalisation to it. Make sure the person is greeted by their name/surname, with agents encouraged to add some energy to the lines to make it stand out from other call clutter.

Related: The Festive Season Might Be Over, But There’s No Rest For Call Centres

3. Provide the origin of the lead

Tying in closely to the above, sales will improve if agents know where the lead comes from. If the lead is from a person who responded to an email campaign, it must be mentioned in the script. Once the person knows the call is related to a request they sent, they will immediately form rapport with the call centre agent.

4. Product refresh training

Much like a car sometimes need a retouch to bring back the shine, so too do call centre agents need a refresh on the products they are selling. Products also evolve, so providing agents with a short course on new benefits, while re-emphasising the key ones, is a great idea.

5. Objection handling

Closing a sale through the telephone is hard work, and call centre agents must be made aware of all the tricks of the trade to seal the deal. If a consumer is not keen, sell harder. If there are regular excuses, find their counterpoints. Is the client’s home language isiZulu? Find the agent who can help. Give them a reason to stay on the phone.

6. Stick to the appointment

Time is money they say, so if the person requested a call back on a specific time, make sure the appointment is kept. Customers don’t respond well if a time slot was missed and yet another call catches them at a bad time.

Related: Why Tyra Banks Cold-Called Zappos’s Tony Hsieh

7. Improve quote ratios

It’s easy – more quotes mean more sales. If the potential customer is provided with a quote, the chances of them converting to a sale is considerably more certain. Where the problem comes in, is guiding a lead through the call to be able to quote. For call centres this means tailoring the script to elegantly move from “Good morning, Mr. Williams,” to “Our life policy will cost you R350 per month”.

8. Incentivise!

With the holidays and Christmas coming up, everyone needs that extra cash, that’s why the time is now to really incentivise sales. Big paydays for agents and teams who sell the most will provide the kindling needed to get those sales fires burning.

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