Paying Your People: The Top Dos And Don’ts

Paying people is essential in business (obviously). But getting it completely right is much harder. While business owners know they have to provide their employees with salaries, they don’t always get the process right.

Fortunately, this post is here to help. We look at some top tips for paying people in the right way, including dos and don’ts for how to do it effectively. 

Don’t Overlook Equity In Pay Matters

First, you’ll want to avoid overlooking disparities in wages. Pay inequities can result in team morale problems and serious legal and reputational risks. Make sure to audit your payroll regularly for disparities in gender, race, and other factors to ensure equity. 

To avoid these, pay careful attention to them. Make sure that you’re paying the right amount for each person in your organization, depending on the role they play. This way, you can build a better culture and a happier workforce that believes you’re being fair.

Do Reward High Achievers

At the same time, you’ll want to reward your high achievers. A culture of excellence is promoted when exceptional effort is recognized and rewarded. Bonuses, raises, or non-monetary rewards, such as additional time off, may be effective at reinforcing positive behaviors. 

Ensure rewards are tied to specific accomplishments so employees understand how their contributions benefit the company directly. Celebrating successes improves morale and inspires others to excel. Don’t just pay people more because you think they deserve it. Tell the rest of the team why they are getting a bumper pay packet. 

Don’t Delay Your Payroll

You also want to avoid anything that might delay your payroll. Fair pay is the very basis for motivation and retention of labor. Research what others in the industry pay and adjust salaries accordingly; regularly update your pay scales to take inflation, changed market circumstances, and staff performance into account.

Be transparent with staff about their salaries. By showing fair compensation, an employee can feel his or her worth has been appreciated and will tend not to leave your workforce.

Do Automate The Process

To avoid delays (because of staffing issues), it’s often helpful to automate parts of the salary payment process. These cut down on the amount of time it takes to do everything and ensure people in your organization get the money they’ve earned on time. 

Use a sales commission calculator if you have a complex remuneration structure. These are handy when you don’t have many admin staff and you want a tool that will save you from having to hire more. 

Don’t Underestimate The Value Of Transparency

Finally, don’t underestimate the value of transparency. Looking at your payroll and exploring policies that can increase trust. 

Make sure you outline policies, for instance, on overtime. Check that everyone understands how much they will get paid if they work extra hours during the week. 

Also, ensure employees know who they should talk to if they have payroll disputes. High-quality internal communication is often enormously helpful during disputes or when colleagues have questions about their payslips.