New and Improved Rewards at Work
Employee Benefits and Compensation Strategy
INTRODUCTION
Innovative Employee Benefits and Organization’s Compensation Strategy
For organizations to retain and recruit the best talent and remain competitive in the job market, they must offer competitive benefits to their employees (Pathak & Pandey, 2019). Also, organizations should understand their employee’s needs and provide benefits to cater to those needs. Since employee needs change over time, organizations have to innovate ways to encourage and engage their workers to improve their overall performance and commitment. The job market has also become dynamic and diverse and as such organizations have to provide employment benefits align to diverse changes. Diversity is crucial for organizations to adapt to a rapidly changing environment and innovation. Also, organizations should offer personalized benefits since to reward and motivates their employees.
Moreover, organizations that utilize simple but cost-effective renumeration often achieve high returns on investment (Biswas, 2014). For instance, organizations can retain, recruit, and improve the engagement of employees while improving customer loyalty, innovation and revenue. As a result of offering a competitive salary to employees, the organization can attract investors, reduce the cost of health care and work burn out. A majority of organization offer additional employee benefit programs such as options for working at home, childcare, scholarships, adoption assistance and referral bonuses which helps to increase employee job satisfaction.
The shared culture program is also useful in improving the organization’s competitive compensation strategy performers (“The World at work Handbook”, 2015). For instance, employees working for organizations with shared culture have a competitive advantage compared to those working in closed culture organizations. Therefore employees are more productive at workplaces when culture integrates with their personal beliefs and values. Also, job sharing programs allow flexible scheduling which provides employees with opportunities to match their personal needs with job schedules. For example, two or more individuals can share a permanent position job by scheduling a flexible arrangement. Additionally, telecommuting also helped employees to work at home by using technological devices and computers.
Employee recognition programs are also an essential element of employee benefits. Also, employee recognition programs range from informal to formal recognition. Informal recognitions focus on the spot recognitions while formal recognitions offer monetary incentives to performers (“The World at work Handbook”, 2015). The organization can also adopt development programs that provide training to stakeholders and other employees. For instance, organizations can create a corporate university on-site for employee convenience. Also, mentoring programs are crucial for guiding and training to new employees since it develops a learning culture and that values creativity and new ideas. The employee wellness and health program are vital for preventing lifestyle diseases, and therefore, organizations that value health and wellness understand their employee’s health needs. Examples of wellness and health programs include fitness centres, weight loss programs and programs for health counselling.
Tying Innovative Benefits to Specific Jobs
Organizations should utilize effective strategies for compensating employees to attract and retain new talents while motivating excellent performers (“The World at work Handbook”, 2015). The organization should also pay their workers based on actual data that consists of the organization’s position against the market wages rate, available resources for rewarding employees and the philosophy of compensation. Today organizations utilize data and pay performance program to inform the decisions on compensating employees. The pay for performance program is crucial to an organization’s strategy on talent since it recognizes an employee’s work by increasing their compensation. However, the employers’ main challenge is to determine the job positions eligible for salary increases based on performance and the amount of money to be compensated.
After calibrating the performance criteria and assessing the employees against the provided criteria, the organization determines which employees receive an increment and by how much based on the market wage rate and the market position desired (Pathak & Pandey, 2019). For example, the organization may decide to increase the wages and salaries of job families that are more crucial to the organization’s success or job families that are far behind the market. Additionally, organizations also look at the current market position for job families or specific jobs by evaluating their market trends. For instance, technical positions move at a faster rate compared to non-technical positions.
The pay for performance system should also measure the performance of employees. Most organizations rely on systems for managing performance which provides quantifiable metrics to determine the performance of employees (Pathak & Pandey, 2019). Organizations work closely with managers to calibrate the criteria for employee performance to identify the performing and underperforming workers. However, calibration is a time-consuming activity but crucial in the consistent management of employee performance across the organization. When the market rate for specific job positions increases, there is a need for allocating more employees for that specific job to keep up with the market movement. Therefore understanding an organizations market position and that of the market is critical in the appropriate allocation of funds which also prevents underpaying the faster moving job position and overpaying the slow-moving ones.
Organizations should also utilize relevant data and tie compensation to the management of job performance which crucial in retaining and developing high performing workers while aligning compensation with the organization’s budget performers (“The World at work Handbook”, 2015). The compensation strategy should also focus on increased performance rather than pay for performance since giving additional compensation to employees for doing their work is not effective as basing their increase on their performance levels and current pay. Therefore organizations should leverage on current data to ensure employees are compensated based on their value outcomes in their organization.
The Effectiveness of Equity-Based Rewards and Creative Approaches
The equity-based reward systems are quantifiable means of motivating and compensating employee at their workplaces (“The World at work Handbook”, 2015). Equity refers to an employee’s reward that represents ownership in a particular organization or company. Many organizations achieve their development goals by utilizing the equity-based compensation approach. For example, the equity compensation approach is critical for retaining employee services while ensuring their commitment is a reflections organization’s success. By using the equity-based reward, organizations ensure that the jobs offered get matched with the strength of individual employees which guarantees the continuity of the organization or company.
Also, the equity reward system ensures that employees are emotionally attached to the organization’s success through allocating meaningful work to employees to achieve a set organizational goal (Thomas, 2013). Moreover, employers should also focus on hiring employees with like-minded beliefs. Also, employers should take a bold step and reward their employee with stock in the organization. However, employers should let their employees understand that their involvement in the organization can only be awarded and not bought. Also, doubts arise as to whether the employees are likely to adopt the organization’s attitude, but the chances are that they will work hard to realize their organization’s growth.
Even though equity-based rewards may lead to the organization’s success, creative approaches prove to be more effective. In most cases, creative approaches the type of employee reward by taking into consideration the employee’s needs. In contrast, the equity-based system of reward provide mechanisms that are one size fit, whereas creative approaches offer tailor-made to suit the demands of individual employees (Thomas, 2013). The demerits of utilizing innovative approaches are that they cannot satisfy all employees. Since fulfilling the demands of employees is a challenging task, large organizations prefer to use equity-based approaches for rewarding their employees since they have to cope with set structures.
Furthermore, equity-based approach for employee rewards is usually monetary and costly for an organization, therefore, requiring organizations and companies to separate employee salary and wages from the equity system of reward (“The World at work Handbook”, 2015). Equity reward systems can also be in the form of compensation which consists of long term incentives for employees such as stock grants, stock alternative and stock options. The equity reward system can also be in the form of benefits that consist of ESOPS, ESPP’s and 401 k plans. Additional reasons that justify the use of equity rewards by the organization include conservation of resources, employee motivation, tax advantages, capital accumulation and creation of wealth.
Elements of Integrating Innovation into Traditional Total Rewards Program
In the past, only certain practices and professions had limited employee benefits and compensation (Graham, 2018). The total reward programs utilized a formula that considered all employees in a particular organization. However, today the traditional programs for total reward have been integrated with innovation which consists of several core elements. The retention and attraction of top talent is a critical component of success in an organization. Therefore, all total reward program elements are essential for organizational success and communication with current or prospective employees. Also, as a result of employees offering their effort, time and talent, employers in return give rewards to their workers. The elements used for integrating innovation into traditional total rewards program include career opportunities, work-life balance, compensation, recognition and performance.
Benefits and Career Opportunities
Organizations utilize benefits as the core element for the integration of traditional reward systems with innovation. Employees benefits consist of programs that supplement monetary compensation for work done (“The World at work Handbook”, 2015). Employment benefits are programs designed to protect employees from risk and include employee payments for days not worked, group insurance and social insurance. The social insurance involves aspects of unemployment, occupational disability and social security. The group insurance includes aspects of retirement, dental problems and mental health. Career opportunities are essential elements for integrating innovation to the system of total reward since it is concerned with advancing the employee’s career. Career advancements usually involve promotions to positions requiring additional responsibility. Companies and organizations ensure that employee’s skills match with their job positions.
Work-Life Balance, Recognition and Performance
Employee recognition and performance is a critical component of integrating innovation to total rewards and the achievement of organizational success (“The World at work Handbook”, 2015). Recognition and performance involve the alignment of the organization’s performance by giving special attention to employees’ performance and actions. Recognition is crucial for motivating employees to work hard and is effected by reinforcing specific behaviours such as extraordinary accomplishments. Besides, recognition is also essential in reinforcing immediate feedback on employee’s activities and performance improvement. Organizations also have policies and programs that aid employees to succeed at work and home. The main categories under work-life balance include caring for employee dependents, community involvement and workplace flexibility.
Recommendations for Optimizing Employee Based Program to Organization’s Total Rewards
Various potential processes can optimize employee-based programs to continually refresh the organization’s total rewards (Graham, 2018). However, to choose the best process, it is crucial to consider possible growth opportunities that business markets can offer. Employee benefit programs should also provide employees with opportunities for becoming organizational leaders since they ought to develop leadership abilities from the organization. The design process of an employee reward system should take into consideration the use of technology in developing organizations and markets. Depending on the organization’s philosophy and history of the organization, different processes may be adopted. However, the process for optimizing employee-based program must be universal and aim at attracting and retaining motivated and talented.
Employees should also be committed to their organizations’ aspirations by ensuring that they assist their organizations in winning market places through a universal process (Heneman & Coyne, 2007). Even though designing an employee-based program is challenging, organizations should focus on employee’s ability to add value to customers attainable through the global provision of a wide range of electronic transactions and cost-effective processes. The process of building employee-based programs should provide world-class services essential for attracting more investor or clients. Organizations should also ensure the maintenance of high-quality records in the process of developing the employee-based program.
For any working organization employees are the most important asset and therefore should be handled be handled with care. Employers are responsible of developing strategies that motivate and fulfill the needs of their workers by ensuring that they are given employee rewards and benefits.However, the traditional means of rewarding benefits to employees have change over time which necessitates the innovation of employee benefits and reward system.Organizations should ensure that the reward system innovations align with employee’s current desires so as to perform their roles effectively while keeping them motivated and satisfied.
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Pathak, P., & Pandey, M. A.(2019). Creativity and Innovation in Reward & Compensation Practices.
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