Employees are the heart and soul of a company. They do their duties and handle their responsibilities to maintain the productivity of the company as a whole. Their efforts, along with the roadmap provided by the executives and management, will ultimately generate high revenue. But what if these employees don’t receive proper credit and compensation? Will they still give their best to the company? No, right? That is why, if you are managing a company, make sure to offer the best compensation package for your employees and communicate it to them by using a compensation plan.
FREE 18+ Sample Compensation Plan Templates
1. Compensation Plan Template
2. Sample Sales Compensation Plan Template
3. Simple Employee Compensation Plan
4. Incentive Compensation Plan Example
5. Sample Sales Compensation Plan
6. Sample Sales Compensation Plan
7. Employee Compensation Plan Template
8. Variable Compensation Plan Template
9. Staffing Compensation Plan Template
10. Free Professional Compensation Plan Template
11. Editable Compensation Plan Template
12. Sales Compensation Plan Template
13. Incentive Compensation Plan Template
14. Professional Compensation Plan Template
15. Compensation Plan Template
16. Example of Compensation Plan Template
17. Free Compensation Plan Template
18. Compensation Plan Template Download
19. Compensation Plan Template DOC
What Is a Compensation Plan?
A Glassdoor survey revealed that approximately 80% of the employees would opt for receiving benefits and perks from a company instead of being granted a pay raise. While some companies find it hard to meet the demands of all of their employees, given the limitations of financial resources, it would not hurt to strategize an effective compensation plan. Besides, happy employees tend to be more productive; thus, helping the company produce more products to the market. A compensation plan is a package that covers details about employee compensation, such as wages, salaries, benefits, and payment methods. Aside from that, an incentive compensation plan design also specifies bonuses and commissions an employee will receive if they met the criteria established by the business.
Various Examples of an Employee Compensation Plan
Before planning out your compensation strategy, you should note that there are several types or examples of an employee compensation plan. Choosing the best components of a compensation package will be your key to attaining an increase in the employee retention rate.
- Hourly Wage Compensation – Non-exempt employees receive their wages based on the number of hours they spent at work. In this arrangement, the employees will receive an additional payment for overtime work.
- Retirement Savings Plans – Some companies offer retirement saving plans to their employees. Some employers sponsor a 401k plan, while others contribute a specific amount in addition to the employees’ contributions.
- Raises, Bonuses, and Incentives – To motivate employees to be more efficient in the workplace, most companies offer pay raises, bonuses, and incentives. Workers who exceed the companies’ standards may receive any of the said compensation. Other businesses also implement a sales bonus structure in their organization to persuade employees to focus on the sales of their products.
- Health-Care Benefits – One of the types of compensation plan the employees look into are the health-care benefits the companies could offer them. Some examples of health benefit insurance plans may cover include hospitalization, prescription drugs, pediatric services, and behavioral health treatment.
How Do You Write a Compensation Plan?
Learning how to create a compensation plan will be easier if you have a sales manager compensation plan sample or just a simple compensation plan example document you can make use of as a reference. Aside from that, you can also make use of our templates, which are specifically tailored to best suit your business’ needs. These professionally written templates are compatible with various digital devices, so editing its content should be easier for you. Nevertheless, if any of these options is a no for you, then start writing a plan for your compensation program with the help of the steps outlined below.
1. Gather Employee Information
The first thing you need to do is to take a look at your company’s organizational structure and keep a record of your employees’ information. These details include their names, position, and department. You also have to make sure that you have a job description for every job title in your company.
2. Set the Amount
Now that you have a complete list of employee information, you can already determine what compensation amount will be appropriate for each position. Moreover, it would also help if you know how much compensation your competitors are offering to their employees. This way, you will have a clearer picture of how you can attract the best talent in your company, and you will know if you offer just the right amount.
3. Consider Overtime
While there is a specified amount of time an employee should work for one day, there are some instances wherein that worker will need to stay in the office to finish his or her task. For this reason, it is essential to take into consideration the compensation you will provide to the employees for overtime work.
4. Determine the Benefits and Incentives to Provide
If you are running a company, you need to offer benefits and incentives to the employees, aside from the wages they receive regularly. Doing so will give you higher chances of having motivated employees. Usual benefits and incentives include medical and dental care, attendance incentives, performance incentives, bonuses, and sales commissions. In calculating and putting into writing the amount of compensation, having an employee bonus plan template in Excel will be of great help.
5. Document Your Plan
After careful compensation planning, you can already start documenting your plan so you can impart it to your employees and everyone who belongs to your organization. The document should include information about its purpose, effectivity date, eligibility, guidelines, and a sheet that explains the amount rendered as compensation.
What is compensation?
Compensation is the payment you give to your employees in exchange for the service they rendered to your company. It may be financial or non-financial. Providing the right compensation helps increase employee morale, encourages company loyalty, and spurs peak performance.
What is the difference between wage and salary?
Salary is a fixed amount of money an employee receives with their performance as the basis. On the other hand, the wage is the amount of compensation an employer provides the workforce, depending on the number of hours they spent to get the job done.
How do I know if someone is eligible for incentive compensation?
If you want to incorporate an incentive program in your business’ plan, make sure that you give compensation to those who deserve it. Generally, the criteria for eligibility includes the job position and the length of service.
Strategizing the right compensation plan is an avenue for business success. Remember that as you set goals for your company, your employees are the ones who work hard to adhere to the plan to achieve such objectives. For this reason, you need to provide them the right amount of compensation. If you need help in creating a compensation plan, all you have to do is choose one of the templates provided above, insert necessary information, and you’re good to go!
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