27 Feb EMPLOYEE COMPENSATION
Employees are invaluable assets for every organization, regardless of type or size. Therefore, ensuring their welfare and engagement can make them more productive and less likely to leave the company.
As a matter of fact, this is not only an internal consideration but also a competitive one because securing and retaining top talent is akin to securing and retaining customers, where effectively identifying the appropriate target and sustaining that relationship lowers long-term costs and increases brand value.
One of the key instruments in attracting and keeping employees is creating an effective compensation package. Thus, compensation must be both competitive and well-designed to meet the needs of the employee. Instructively, though, employee compensation goes beyond dolling out cash. Other forms of remuneration should be identified, such as sponsored vacation, cinemas, dinner with friends or family, amongst many others. Naturally, someone who is appreciated tends to do more and possibly surpass the previous record; which in turn will most likely encourage other staff to toe the line.
Cash compensation can be a two-edged sword if it not managed properly. On one hand, a high base salary and a lucrative benefits package can help an organization keep and retain high-quality employees. On the other hand, high levels of compensation create high overhead for the company. In addition, attracting employees purely through offering high levels of compensation has disadvantages. For instance, such employees may have little attachment to the fundamentals of the job and may leave as soon as they find a better offer.
Therefore, companies need to find a balance when creating a compensation package to attract quality employees and keep overhead low. To identify this balance, companies must look at the structure of the wages within the organization, the compensation common in their industry, as well as their strengths and those of their competitors. By looking at these factors an organization can attract the employees it needs to maintain a competitive advantage and keep employee turnover low.