Compensation Programs Deal With More Than Just Money
When implementing a compensation program, employees actually get a total package. And that includes not only compensation opportunity in terms of stock, cash and incentives but other things as well. Look at the whole package when looking at the tools to attract and retain people. Our main objectives with any compensation program is attract, retain and motivate to the extent though that you can use non-monetary rewards to help in this process, you’ll take some pressure off of the compensation area and maybe use less cash or less stock and that sort of thing. So you have to figure out what does the company really have going forth.
Compensation programs are the largest expense companies have these days. And all companies try to achieve the greatest return on investment for what they spend on compensation programs. But there are lots of other things we could do. Recognition and status are big things, challenging work, learning opportunities, flexible schedules, good managers and coworkers. These are all things that people look for in their organization that don’t cost anything.
These are all things that don’t cost very much that you can do as part of your overall compensation programs. More non-monetary rewards, praise from their manager, providing employees with information to do their job, involving employees in decisions that affect them. It sounds pretty cheap. Most companies don’t really spend much time in this area but it’s a good idea if you want compensation programs that attract, retain and motivate your workforce.
Edited Remarks from “The Seven Deadly Sins of Employee Compensation Plans (and How to Fix Them)” by Rick Olivieri
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