Nowadays more organizations are changing how they pay and view their employees. They are treating them better than in the past. Successful businesses are nowadays developing creative programs that are guiding their employees to focus on improving the business and then later they are rewarded for their contribution towards the company. Unfortunately, some of the employees and businesses are reluctant in changing their old ways.
In the modern business environment, long term winners are the companies that will provide a challenging and flexible working environment with employeesâ rewards and recognition. If the employees are asked to share in the risk, then they should also share in the rewards.
What the Employees Want
Initially, most of the employees thought that money was the main issue. When looking for what owners and employees thought were the key motivating factors, the employees stated that recognition, empowerment, and challenges were among the major issues they were looking for.
Despite the rise in unemployment and the softness in the current economy, there is still a shortage of the skilled and insured workers in many agencies. In such an environment what could be done to attract and retain the brightest and best employees and challenge them to attain their business goals?
You should first understand that money is not the solution. Have in mind that the high performing employees are looking for something more than the high salary that you will be offering. The employee plan is supposed to include a package of rewards, environment, and recognition. Some elements such as flex-time training and benefits are elements that will retain and attract employees. Other factors such as incentives, opportunities, challenges, and bonuses can also be counted as forms of compensation. A designed plan should have both the short-term and long-term compensation components.
The total compensation approach is the ultimate way to attract and retain employees. A firm that uses total compensation plan package generally transforms the employees into committed and high performing individuals. Below are a few tips that we discovered from Sphere Recruitment (http://www.spherelondon.co.uk/blog/benefits-survey—where-do-you-rank) and Entrepreneur.com (https://www.entrepreneur.com/article/223516) that any company can use in retaining and attracting the best employees.
The system of monitoring every work an employee does is out. Employees with authority and multiple skills are in todayâ s companies. The companies that can perform at this rate will always reach incredible heights.
You should provide them opportunities for skill development and teach how to spice up work. You should encourage your staff to take classes to be licensed for courses and earn adequate CEUs. You should send your employees to business skills workforce, sales class, or team building sessions. And especially for your managers and sales employees, encourage them to consider online negotiation skills training in a high-energy virtual environment.
The workforce nowadays is searching for flexibility at work and balance in the employeesâ life. The management has to evaluate ways which can realistically provide a pleasant working environment and a flexible one. For instance, traditionally an employee would work in an office for a given number of hours. Nowadays there are variations in companies. For example, an individual can work for four days or even work from home due to the flexibility in the work. These flexible working hours will attract and retain your employees.
Rewards and Recognition
A very effective way of reinforcing your companyâ s values is through non-cash recognition awards. For instance, the employees who provide innovative and outstanding services to customers are given special awards. The employees could be nominated for these rewards by their peers or the customers.
Some of the rewards that can make sense to your employees include:
– Giving paid holidays
– Providing tickets to music, sports, or cultural events.
– Thanking your employees in a local newspaper.
– Paying for tutoring for the child of the winner.
– Paying for dinner for the winner and their spouse.
Though money is not always the key motivating factor, companies that have a bonus plan for their employees based on the companyâ s profitability makes the employees strive to increase the companyâ s sales and cut its expenses. Profit sharing may be determined by the overall business or through the profit centres. The bonus could then be distributed according to the management discretion.
The variation of the profit sharing is the reduction of employees based compensation and providing the quarterly bonuses that are based on departments performance. A plan that will track the employee performance will, therefore, help them see the relationship between their work and the compensation.
Split-dollar Life Policies
This is a policy that aims at offering life insurance for a worker or their spouse at a much-reduced cost to that person. The insurance premium will be shared by the employer and the employee, and thus is referred to as ‘split-dollarâ . It is a very effective method that can be used in retaining key workers while the business gets reimbursed for every dollar that it gives out. From the perspective of the employer, the split-dollar policy is a cheap technique of purchasing Key man insurance for any business or personal needs of the selected employees whom the employee feels to be indispensable for their business. This improves the loyalty of the employee by offering significant insurance benefits.
Stock Appreciation Rights and Phantom Stock
SARs or Stock Appreciation Rights and phantom stocks can both be classified as specialized deferred compensation methods that are designed with an aim of giving the employee the economic benefits that come with stock ownership without the worker having to own any stock of the company really. When a business owner will not or cannot alter the present ownership structure, Phantom stock and SARs are usually used, to offer the employee with some kind of incentive compensation that is based on the real performance of the business.
A SAR can be simply defined as a grant to a worker which provides that individual with a right, at some particular time in the future, to get a cash prize that is equal to the appreciation in value for a specific number of shares of the stock of the firm. In concept, SARS can be likened to stock options; however they are different in a number of ways.
On the other hand, phantom stock is viewed as units if value, that directly match up to a corresponding number of shares of the firm stock. The phantom stock units are given to a worker for a specified time period. When it matures, the worker receives direct compensation in cash, this is based on the Phantom stockâ s value.