Innovative compensation strategies and employee retention in competitive markets

¶ … employee rewards has been increasingly brought to the forefront. This is because globalization is creating a shift in how firms are operating by requiring the utilization of specialized skills. These individuals are necessary for a firm to be able to adjust with changes inside the marketplace and new competitors. As a result, a number of organizations have begun focusing on transforming compensation strategies to address these needs. To fully understand how this is occurring requires focusing on: the way this can improve competitive compensation plans, how they are tied to specific jobs, the effectiveness of an equity-based rewards system, the key factors for integrating this model with traditional rewards programs and providing recommendations that will streamline these initiatives. Together, these elements will provide specific insights as to how a firm can improve their competitive compensation strategy. (Wilson, 2003, pp. 1 -- 15)

Innovations of Employee Benefits

Innovations in the type of benefits that employees are receiving will lead to a transformation in the workplace. This is because everyone will compare the kind of compensation they are receiving with other firms. Those that offer the greatest benefits will be the most sought after. The reason why is, these areas will address the critical needs of the individual. Moreover, the generous rewards plans are illustrating the kind of work environment that exists inside a particular employer. (Griffin, 2012, pp. 396 -- 400)

For staff members, they will compare what they are receiving with their peers inside the industry and their levels of job satisfaction. When there is an improvement in compensation plans, there will be changes in the attitudes of employees. This is because they will use the rewards program to determine how much the firm cares about: their well-being and time. As a result, innovations in compensation plans will have a dramatic impact on the underlying levels of productivity. (Griffin, 2012, pp. 396 -- 400)

Evidence of this can be seen with Google, as they have a generous rewards program for developers including: an onsite doctor, free childcare, a flexible work schedule and outstanding pay. This is showing how certain benefits are tied to those jobs that are most in demand. Those firms that are able to make continuous improvements in these areas will be able to attract and retain the best employees. (Griffin, 2012, pp. 396 -- 400)

Benefits and Specific Jobs

The way that benefits could be linked to a specific occupation, is to seek out individuals who are highly qualified (with predetermined skillsets). This will ensure that they meet the basic standards for the position. Next, there must be a focus on offering employees more in comparison with other firms. This will have a positive impact on how the individual will view their role inside the organization and their responsibilities. Once this takes place, is when they are willing to go above and beyond what is required for the position. This will lead to positive changes in customer experiences. (Griffin, 2012, pp. 396 -- 400)

Using the previous example from Google, the benefits for the most important positions are tied directly to compensation. This is because it is used as a way to entice someone to work for them over other firms (i.e. Microsoft, Oracle and Apple). These programs are designed to give employees a sense of on the job satisfaction by: providing them more than what they will receive elsewhere. When this happens, they are willing to help the company to achieve its objectives (based on these positive feelings). (Bauer, 2005, pp. 859 -- 891) (Griffin, 2012, pp. 396 -- 400)

Integrating Innovation

The best way to implement innovation into a total rewards program is to understand the needs of employees. This will be accomplished through conducting an anonymous survey to see what specific areas are most important to staff members. At the same time, a compensation consultant will be brought in to increase the total rewards package above what competitors are offering. This will provide a basic foundation of addressing the most pressing issues for all employees. (Wilson, 2003, pp. 103 -- 137) (Kamery, 2005, pp. 49 -- 76)

To add innovation to the process, executives could study other compensation programs that are offered by some of the most successful firms. They could then slowly implement select elements into the workplace. This will create a change in the attitude of employees, who will see the firm in a positive light. Moreover, this will allow managers to implement systems that can increase productivity by: improving the levels of enthusiasm among staff members. (Wilson, 2003, pp. 103 -- 137)

Keeping Total Rewards Fresh

The best way to keep the total rewards program current requires using anonymous surveys on a regular basis. The reason why, is because these tools can be used to help understand what needs are most important to employees. This will allow the firm to make changes to their compensation plan in order to keep up with these demands. (Kamery, 2005, pp. 49 -- 76)

Moreover, there should be an annual survey conducted that studies what competitors are offering. Any changes in benefits can be accounted for by the firm (which will allow them to retain key talent). This could be used to show how the company is offering employees more in contrast with competitors. These are important factors in deciding where someone will work. (Kamery, 2005, pp. 49 -- 76) (Wilson, 2003, pp. 103 -- 137)

Once this takes place, is when specific recommendations can be made to the board of directors about the total rewards program. This will help executives to determine what issues are most important to staff members and how to address them. In the future, this approach will allow a firm to quickly adjust with any kind of compensation related issues. This is how they can retain and attract the most talented individuals. Over the course of time, this will help the company to be able to maintain their e edge. (Kamery, 2005, pp. 49 -- 76) (Wilson, 2003, pp. 103 -- 137)

Clearly, a competitive compensation strategy will address the needs of employees. This is accomplished by focusing on: what areas are most important to them and then addressing these issues. Over the course of time, this will help staff members to see the organization in positive light. This is when they will do more to ensure that the firm is able to: meet the demands of customers and quickly adjust to any kind of changes in the marketplace.