Compensation matters
FOR SOME, the grass is always greener on the other side. Especially when it comes to matters of compensation. The employee who feels that he is not getting what he deserves moves to a more lucrative job. In such a case, smarter compensation becomes the retention tool of the day.
An ideal compensation policy increases the employee's standard of living, creates an equitable work-life balance, ensures material comfort and generates a sense of security. Most importantly, from an employee's perspective, a satisfying compensation plan is a reflection of his worth in the company and those who feel valued stay.
Employees expect adequate compensation for what they put in. To calculate this, employers must use the variable rate of giving pay or bonuses, depending on performance. Simply put, the better you do, the more you get.
Performance needs to be assiduously assessed to arrive at a fair and just compensation. There are times when the same amount of bonus is given to all workers, irrespective of performance. This generates dissatisfaction and unhappiness among employees.
Many methods can be adopted for assessing performance. A discussion with the employee on his/her performance on a regular basis helps create a sense of being reviewed and appreciated. An account of tasks undertaken, both accomplished and worked on, should be made. An employee's productivity level, , his/her multi-tasking abilities, the number of tasks accomplished, etc. should be assessed for arriving at the right compensation. This will help an employee feel that he is being fairly evaluated and justly rewarded.
Many companies use the points system to measure capability and effort. These points translate into various compensation and benefit programmes. This makes the employee aware of the traits and accomplishments that the company appreciates.
Salary is an integral part of compensation and it is essential to get it right. The validity of a rise can be based on the employee's past performance. The prevailing salaries in the market should be kept in mind when designing salaries. If people get more for the same job elsewhere, they might just do a job switch.
While salaries can be determined easily, benefits and other compensation will have to be arrived at appropriately. Bonuses should be based on performance. Profit-sharing is another method to lure the employee. Giving a percentage of the profits to employees based on their work will reap great benefits. Stock options are also lucrative. They create a sense of ownership in the employee.
Benefits like health insurance, travel, accident insurance, etc. go a long way in keeping employees happy. An individual retirement plan can be a way of compensation. The employee will be happy that his future is taken care of and this will be a great reason to stay on.
Funding the college education of an employee's child can also be an innovative way of giving a bonus.
Ultimately, it is about creating and imparting the feeling of worth and value in an employee. And those who feel their efforts are duly rewarded and appreciated will definitely find the grass greener on their own side.
UZMA HYDER
faqs@cnkonline.com
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