Compensation is critical to organizational strategy since salary levels are a crucial element when it comes to attracting and retaining the best people. Employees are willing to stay when they are adequately compensated, just as they are willing to apply elsewhere where appealing compensation packages are being offered.

Compensation equity is the perception by employees that they are being paid fairly. Employees need to be paid a competitive salary as this leads to increased performance and output. A competitive salary refers to the total remuneration and benefits package an employee receives being at or above the standard market rates. A competitive salary indicates an external equity. External equity is the perception that an employee is being paid the same as others working in a similar job at other companies. Internal equity means that the compensation amount is appropriately placed within the salary or bonus range in comparison to other employees within the same job and/or salary range, taking into account any performance differences.

As an employer your employees should be fairly compensated in relation to the performance results they have achieved and their pay level is equitable both internally with other employees in their job and externally with the outside labor market. When employees believe that their salary is basically equal to the value of their work it is known as salary equity. It also means that employees have equivalent responsibilities with about the same degree of knowledge, skills, experience, productivity and seniority are paid about the same.

Competitive compensation is the direct (monetary) and indirect (non-monetary) pay that employees receive for their work. It includes paid vacation time, flexible schedules, cushioning allowance, fuel and transport allowance, meal allowance, medical aid cover, more robust retirement plans, housing allowances, and more. 

Successful employee retention should always be a core business goal. When employees leave your company the impact on your organisation can be significant. Project timelines may suffer, costing the company additional time and resources to resolve. Costs associated with losing an employee also include the expense of hiring and training a replacement, or having to spend resources for onboarding programs.

It is important to regularly benchmark the salaries you offer against the broader market to ensure you are in-line with or exceeding employee expectations in order to attract and retain the best talent. You have to take into account the trends and market performance of your company. Find out what your competitors offer for a similar position, taking into account your company’s industry and size.

Partnering with a quality consultant can help ensure that your compensation plan helps you achieve your strategic goals. To ensure that your salaries are competitive, it's important to have access to the most updated, broad-based compensation survey data that Precise Management and Research provides. Precise Management and Research Consultancy salary and benefits survey report identify the market rate that other organizations pay for similar work in the external marketplace. Our salary and benefits survey data is tailored to your organization's needs. For all your inquires on our informative salary and benefits survey reports for your sector, contact Precise Management and Research Consultancy at info@precisemrc.co.zw and on 0719 225 464.