Here's how you can secure a fair compensation package in retail operations.

During a compensation review, key factors such as market competitiveness, employee performance, internal equity (ensuring fair pay within the organization), and budget constraints are taken into account. The goal is to determine if current compensation packages are competitive enough to attract and retain talent, while also being financially sustainable for the organization.

Another popular employee compensation strategy you might consider is salary plus commission. This is where you pay your employees a lower base rate, which they can then top up with performance-based commissions. This works best if your employees work individually rather than as part of a team. The better they perform and the more targets they hit, the more commission they earn. A salary plus commission compensation style arguably enables you to offer the best of both worlds. Although your employees won’t get the same level of income security as they would if you paid them a fixed salary, with a commission-based strategy, they have the financial incentive to perform well in order to increase their base salary.

An hourly strategy can also be appealing if your employees are motivated by flexibility and the possibility of earning overtime when they need it. For example, it could work well for students or people with young children. However, hourly compensation offers less financial security, especially if the hours you offer your employees frequently fluctuate from one week to the next. Hourly employees are also less likely to receive additional benefits such as health insurance or PTO, which might put employees off from joining your company.

Finally, make sure you are fair. This doesn’t mean that all your compensation packages should be equal. In fact, you will probably implement a number of different strategies for different employees depending on their role and level of seniority. What we mean here is that you should reward good performance fairly across the board, relative to each role. If certain groups feel they’re being rewarded unfairly compared to others, then you risk disengaging your workforce. This is relevant internally or compared to the external market. Make sure your compensation strategy has clearly defined benchmarks and that you meet any expectations that you set.