Let's be real: no matter how important your organization's mission is, people work to get paid. So, we've crafted a template that enables you to explain your compensation structure and talent development plans.
This document is a template for you to create and explain your approach to compensation as part of your employee handbook. You can read below or download it as a PDF here.
Note that we have specified in [brackets] areas that you should change yourself, such as inserting your company name or adding more detail.
Note: this template is not a legal document and does not consider local, state-specific, national, or international laws. Each state and locality may have very different laws and policies. So please consult an employment lawyer in your state to approve your compensation structure and employee handbook.
What's included in this article:
- Compensation structure
- Pay days
- Performance reviews and rewards
- Performance reviews
- Raises & promotions
- Rewards & bonuses
- Training and talent development
[Insert company name] follows the Fair Labor Standards Act (FLSA) of the United States. There are two types of employees defined in the guidelines of the act:
- Non-exempt employees: these employees at least receive a minimum wage and we compensate them for overtime as defined by FLSA's policies
- Exempt employees: are employees to whom the guidelines don't apply. Typically, they meet all three of the following criteria:
- Paid on a salary basis
- Paid at least $23,600 per year or $455 per week
- Performs exempt job duties, such as executive duties. A list of exemption tests is here.
If you have questions about what kind of employee you are, talk to your manager.
If you are an hourly employee, please record your time and clock in and out for your work.
[Our software is X. If you are unsure how to use it properly or have questions, please talk to your manager].
Further, if you are working overtime (as described below) whether you are a salary or an hourly employee, please record those hours too.
Sometimes you may need to work more than your usual hours. If that's the case, you'll receive payment for your overtime hours according to the relevant laws.
If you are an exempt employee, the laws do not entitle you to overtime pay.
If you are a non-exempt employee, you will receive pay for your overtime hours at one and a half times your normal wage. Please record these hours so we can calculate your pay. Please get overtime approved by your manager if possible.
We pay employees bi-weekly, so on the 15th and the 30th of every month through [direct deposit/cheques/cash].
If for any reason you have a dispute with your pay, please ask your manager.
Also, for any expenses that you incur personally for the business, you will receive reimbursement on your next pay day (once we review and approve the expenses). Please refer to our expense policy to ensure you record and submit those expenses correctly [link to expense policy].
Performance reviews and rewards
We have a formal performance review process that ensures employees receive proper feedback. We reward exceptional performance accordingly.
First off, we give performance reviews [annually/bi-annually/quarterly]. In this process, your manager will write a brief report on your performance and then will meet with you to give you feedback in person. The performance review process looks to both acknowledge good performance and to provide constructive feedback to improve and grow.
Note: this will not be the only time that you receive feedback. You will meet with your manager on a regular basis and will receive feedback. Also, you can always request more formal feedback. That way, there will be no surprises come review time.
We expect that every manager:
- Gives clear and actionable feedback for their employees
- Is regularly in contact with their team members
- Has a record of their meetings and can track progress and feedback over time
Raises and promotions
Part of the performance review process is to determine if an employee merits a raise or a promotion. A raise means permanently increasing your salary while remaining in the same role. A promotion means that you will move up in the company, typically accompanied by a job title change and a raise.
We believe in a merit-based raise and promotion process. While we can't guarantee a raise or a promotion on a defined timeline, we do believe in rewarding good performance and want to help people get what they deserve.
Rewards and bonuses
Another form of compensation that we may offer are rewards or bonuses.
You may get a one-time reward for various reasons, for example, a strong performance on a project or winning a company contest. Once confirmed, if it's a cash reward, you will receive it in your next paycheck. Sometimes, you will get a reward as a gift card within a reasonable amount of time.
A bonus is similar, but it is specifically for your performance towards a goal, such as the number of sales that you made. You may also receive a bonus based on overall company performance. Bonuses may be paid out at any time, but typically at the end of the quarter or at year-end.
Training and talent development
Our employees are the most important part of our business, so we actively provide on-the-job training and we also aim to provide other talent development opportunities
We'll train you to the point that you feel confident to do what you need to. Our managers will deliver most of the training but if there are outside resources that you need to perform your responsibilities, we'll ensure that you get the support you need.
We also supply coaching and mentoring through our performance review and feedback process. We'll regularly provide feedback to you and ensure that you are able to improve and develop over time.
Also, if opportunities to attend training workshops, trade shows, or conferences come up, we'll look to give those opportunities to employees.
Read next: Benefits and perks