HR Toolkit 5: Agreements & Compensation

So the purpose of the agreements and compensation section is to keep everything that has to do with signed agreements or documents that describe the parameters of the employment relationship. So it’s the contractual pieces that are most important to keep originals of and have them filed in secure spaces. It’s important to keep signed originals on file for confirmation of acceptance of employees. Terms of employment, keeping the most up-to-date salary information in this section is also helpful when determining what an employee’s salary is going to be without confusion. We recommend filing from the oldest agreement to the newest so that you’ve always got the newest in the front. So in this section, you would have employment agreements, amendments, and confirmation of terms. You’d have an employee handbook acknowledgment form. For example, you might have promotion letters, salary change documents, and payroll-related forms. Like tv ones, although I think those are better served in a payroll file, and you might have them here as well. Let’s talk about an employment agreement; an employment agreement includes details of the working relationship, including but not limited to the salary, the start date, the title, the hours of work, the benefit entitlement, just a summary and what the benefits booklet or your handbook to have all the detail vacation entitlement for the first year. Your employee handbook, probationary period termination confidentiality, and non-solicitation clauses. Employment agreements should be signed by both the employee and employer, and a signed original should be on file for future reference purposes. I think it’s important that every employee have an employment agreement. It doesn’t matter. The role doesn’t matter. The position doesn’t matter the size and shape of the organization. I think everyone should. Please don’t use what I’ve said to you as the template for creating one. I think you need to seek the right advice to create the right ones for yourself. This is just a sampling to give you a sense of what should be in it because you want certain things in your employment agreement. Certain things in your handbook, so have them talk to one another. So in this section again, ensure you’ve got signed employment agreements by everybody and if you don’t have them all, then get advice to make sure you get them. The next section is the employee handbook. So ideally, every employer has an employee handbook for their employee group. And it doesn’t matter. You know, sometimes what we’ve done for construction organizations, for example, is we’ll have one main handbook that talks about the organization’s culture, and then we have a section for the office and a section for the site. It doesn’t have to be. For example, I looked in an employee handbook the other day that was a hundred and ninety-seven pages. I strongly recommend it be cut down dramatically and written in the tone of the organization’s culture. It doesn’t have to be a big rules book. It could mean it has to be something that makes sense for you, so one of our team members at jouta said that the best handbook would be one page. And I would say I don’t do dumb to hurt your business. However, I think you need a little bit more than that, so make sure that it makes sense to make sure you’re following all the legislations that govern employment. Around that, but simultaneously, an employee handbook can be your most powerful communication tool when linked to your culture. It drives productivity, and it aligns with all the legislation. I could spend a whole day just talking about an employee handbook. Here’s a little example of an employee handbook table of contents again. Please don’t use this as that absolute. Here’s what it needs to look like; it’s just a sampling of some things you could have in a handbook, like who you are, day-to-day details, time away, vacation benefits, and perks. One of the things we often see with employers is when it comes to benefits and perks, they’re not highlighted anywhere. Tell them who you are as an employer and make sure it’s clear the kind of things you do for them. Compensation 101 is important so that when you’re hiring employees, you understand what your philosophy is. How you’re going to do it? Do you have a policy associated with it? Do you know what you’re going to do with base pay? Are you going to have any add-ons? Are there any incentive pay or benefits or perks? How are you going to administer it? There’s an 80 20 rule that employees if they know that they’re being treated fairly and consistently when it comes to the compensation, they think of compensation about 20% of the time. If they don’t think they’re being treated fairly consistently when it comes to compensation, they think compensation 80% of the time. So obviously, we want to get them to the 20%. We want to ensure that whatever you do, you do consistently. You know I don’t have to agree with your philosophy as an employee if I don’t want to, but if I know what is coming in and I get hired with that knowledge, then I’ve chosen to accept it. So be clear about the kind of employer you want to be when it comes to that. Do it consistently. Make sure that I know that you’re treating everyone consistently when it comes to that, and you’re off to the races. Salary increases make it count, you know. I think it’s unfortunate that you would take the time to give someone a salary increase, and then the next thing they know, it’s sitting on their direct deposit. I think one of our employers in the construction industry is amazing. The CEO rates a hand letter on a card to every employee, and at the time he was doing this, there were probably about 50 of them, and for each one, he would write what he thought about that employee. So that employees know that they are valued, so don’t just give an increase. You can do a salary letter. I’ve got a sample here for you that you can download. It’s just a simple letter, but at least they’re getting something in writing for me that’s saying they’re getting an increase. But I would take the time to personalize it. Please give them a card or do it in a style that works for you but make sure that they understand that they’re valued and that giving an increase for an organization could be very expensive. Don’t lose them the opportunity by simply putting it into the direct deposit. In summary, for this section, employment agreements should not be optional. A well-written employee handbook can be your most powerful communication tool within an organization, regardless of size. This has been an initiative of the city of Penticton economic development department, and I’m Cori.