Employee compensation: More than a paycheck
Rumor has it that top talent wants to be hired by an attractive or progressive company; not the one offering the same benefits and incentive packages as any other average organization. In order to attract those high-performers in the first place, companies need to differentiate themselves from their competition and a well-designed employee compensation strategy helps to attract, motivate, and retain those high-performing valuable employees.
A comprehensive employee compensation package does not start and stop with base salary. Don't get me wrong, a paycheck (by definition) is a big part of compensation but your total package can also include:
- Employer contribution to benefits (health, dental, vision, etc.)
- Flex time
- Employer-sponsored retirement plan
- Staff development course
- Tuition reimbursement
- Subsidized daycare
- The opportunity for promotion or transfer within the company
- Bonus programs
- Public recognition
- The ability to effect change in the workplace
- Volunteer programs
How does this fit into the big picture?
The employee compensation package you offer plays an important role in your company's ability to attract top talent as job candidates. The specific components of an attractive package vary per employee: a high base salary may attract a top job candidate that is 20-something and single, while a job candidate with a family may consider a flexible work schedule or a comprehensive benefits package extremely important. When recruiting, consider what may be important to your top candidate.
Compensation often impacts an employee's motivation and job satisfaction. Many employees feel motivated to help their companies succeed when they feel connected to the company itself. The satisfaction that someone derives from his/her work – along with the appreciation and acknowledgement he/she receives from his/her co-workers and supervisors – can have an enormous impact on an employee's engagement level. If companies want to motivate their workforce, they need to understand what their employees really value – and the answer is bound to be different for each individual.
Retaining productive employees is critical to running a successful business. A recent survey revealed the top reasons that employees would be motivated to start looking for another job are:
- Better compensation and benefits (53%)
- Better vacation and holiday benefits (35%)
- Ready for a new experience (32%)
Companies that offer a robust employee benefits package, provide opportunities for advancement, and give praise, whether formal or informal, have a much better chance of retaining workers than those who don't. It's all about reading your employees and understanding what attracts them, motivates them, keeps them engaged, and ultimately keeps them at your organization.
This blog post is one of three in a series about employees and what keeps them motivated. Stay tuned for part two coming next week where we beg the question: Is Salary the Real Motivator?