May Topic: Career Path

Providing employees with a career path is a key component to building a strong business.

Overview

Providing employees with a career path is a key component to building a strong business. A company that offers benefits for leadership and promotes its high-performing employees maintains its investment in its team members, builds morale, and fosters a culture of loyalty and longevity. An employee’s career path must be integrated with all aspects of the business. Following are five key areas of focus to integrate a career path:

1.     Vision for Growth

2.     Organizational Chart

3.     Training Programs/Mentorship

4.     Performance Reviews

5.     Compensation Planning

Vision for Growth

The starting point for a career path is a vision for growth – both the growth of the company and the professional growth of the employee. It is the responsibility of the CEO and leadership team to set the vision and communicate it with the staff in a clear and compelling way.

Set aside time at least once per year for a company leadership summit or extended meeting to discuss core values, goals and strategies, and new systems or practices. This provides the tools to introduce new employees to the culture of the company, remind existing employees of why they do what they do, and keep everyone on the same page about where the company is going in the future.

Organizational Chart

The best way to physically map out a vision for growth is through an organizational chart.

Create a current organizational chart and make sure every employee understands it. This will show a path upward for employees who want to grow in the company. Design future organizational charts based on the growth you want to see in 2 years and 5 years. Evaluate the positions that the company will need to fill and consider how employees will need to grow in technical and management capacity to fill these positions. It is often less risky and less expensive to develop from within.  

Training Programs/Mentorship

Take the time to invest in employees though mentorship, in-house training, professional development, and performance reviews. Mentorship should focus not only on technical skills in the position, but on ways an employee can be successful in the company long-term. Then map out the skillsets that are needed to fill positions highlighted in the future organizational charts. Training programs should include both technical and behavioral training. Much of the behavioral training is driven by company culture and comes in the form of mentorship.

Performance Reviews

Performance reviews provide feedback to employees to help them know whether they are meeting expectations, need to make changes, or are ready for additional responsibilities. Performance reviews help employees along their career paths and keep the company on track to meet its goals. It is best to conduct company-wide performance reviews twice per year. The company should review all employees’ performance, using its own standard form to evaluate:

1.     Technical Capacity

2.     Attitude

3.     Overall Contribution

4.     Career/Technical Goals

Performance reviews should vary based upon the level of the employee. This is often done in tiers. Forms should be signed off by the supervisor, reviewed with the employee, signed by the employee and filed in the employee’s personnel file. Performance reviews should be used when considering compensation adjustments.

Compensation Planning

Set a value for every position. This is based not only on the market but also on the value of this position in your company. An employee’s compensation should reflect this value, with a target range depending on performance. Remember that compensation includes:

1.     Salary and wages, and any bonuses

2.     Benefits, such as

a.     Health, dental, and life insurance

b.     Retirement and 401(k) plans

c.     Paid time off, such as vacation and sick days and holidays

3.     Professional development

4.     Profit sharing

5.   Employer taxes: for every employee, the company takes on responsibility for federal and state employment taxes.

In determining compensation adjustment:

• Evaluate how the employee is performing in their role

• Compare budget and actual to see how the year is shaping up.

• Cost of living – if budget allows, use inflation to determine a compensation adjustment pool (as opposed to raising all employees’ salaries according to the same inflation rate)

• Evaluate if the employee is ready for promotion

• Evaluate if the company is ready for the employee to be promoted

Longevity of employment:  Compensation planning is a vital part of encouraging employees to stay with the company, along with other factors such as mentorship, vision-setting, and employee appreciation. Employees should know generally what each role is worth and what it takes to be promoted.

Summary

Becoming “a great company to work for” benefits not only the employees but also the business itself. It saves the company time, money, and effort to train its people from the bottom up and provide career paths for them. Businesses can build career paths into their long-term plans by setting a vision for growth, mapping out current and target organizational charts, providing ongoing training, giving employees feedback on their work, and integrating compensation and benefits into the budget.