Compensation and rewards
Compensation is about both fairness and motivation. Understanding this mix will help you connect with your team and develop the right compensation tools (beyond stock options!).
To attract talent and remain competitive, startups need to design an effective compensation plan that meets the needs of both their business and the market for talent.
A company’s compensation structure must be competitive to attract and retain employees while remaining cost effective.
Startups can use benefits to enhance compensation and attract and retain employees.
A job evaluation plan is a tool that helps your startup determine the internal value of a job in order to assign the appropriate salary level.
Bonus and incentive programs can yield effective results. But if not properly run, these programs can become a barrier to business success.
Benefits are a key part of an employee’s compensation package. Some types of benefits are legislated, while others are offered to be competitive.
Proper handling of compensation issues requires knowledge of employment trends, how to value jobs both internally and externally, and how to adapt to varying financial conditions.
Profit-sharing plans can be a useful incentive tool to help employees focus their efforts on the long-term success of your startup.
Project bonuses, also called milestone bonuses, focus employees on critical deadlines. Project bonus plans, due to their high-profile nature, are usually well-communicated and well-defined, running over the short term (three to six months).
Why offer employees equity in your startup? Allocating equity to your employees in the form of or stock option plans.
Stock options plans are common to executive compensation packages, but they can be offered to other employees as well.