This paper outlines a practical strategy for evaluating and improving a company's salary and compensation package to address employee retention and recruitment challenges. The author proposes a multi-step investigative approach — including anonymous employee surveys, exit interviews, and competitor benchmarking — to identify root causes of turnover. Drawing on the idea that employees seek more than base pay, the paper recommends performance-based bonuses, targeted work-related benefits, and increased paid vacation time as cost-effective retention tools. The argument emphasizes that compensation philosophy, employee recognition, and a sense of purpose are as important as salary in keeping skilled workers engaged and loyal.
To assess the impact of a company's salary and compensation package on its employee recruitment and retention numbers, it is important to follow a structured approach. Employees work for more than a salary and benefits — they also seek job satisfaction and a sense of meaning and purpose in their lives. These ideals are inherent in a company's compensation philosophy (Ojimba).
The first important step is to investigate the root of the problem by conducting interviews with the relevant parties, including both existing and former employees. For existing employees, a questionnaire distributed anonymously would include questions such as whether they plan to leave the company within the next two years and their reasons for this, as well as whether they are satisfied with the current salary and benefits. The statistics emerging from this investigation can then be used to implement preventative measures.
The second step would be to contact employees who have left the company within the last twelve months. Some of these employees may not wish to share their thoughts, but the aim is to obtain at least three interviews. According to Stacey Amig, there are several reasons why an employee might leave a company, and salary and benefits are not always at the root of the problem. Some employees may experience issues such as poor supervision, unchallenging work, and a lack of recognition for good performance.
The third step would be to discreetly investigate the compensation packages and salaries offered by competitors and compare them with those of the company. If the instinct that compensation is a primary driver of turnover is correct, this comparison will help confirm or refute that assumption.
Finally, the fourth step involves researching documents relating to salary, benefits, and retention in order to determine what measures can be taken to improve these at the company level.
"Bonuses, targeted benefits, and vacation increases proposed"
Employee satisfaction is closely related to work performance. When employees feel that they are duly compensated for well-performed work, they will be more likely to remain in their jobs. Targeted benefits such as company cars or computer upgrades will furthermore provide personnel with a sense of being valued for the specific work they perform. Reduced stress through additional vacation time also contributes to overall well-being and engagement. Employees should feel that all the benefits they receive are at least competitive with those offered by other companies, reinforcing their decision to remain with the organization. Understanding and acting on these principles is central to any effective human resource management strategy.
You’re 62% through this paper. Sign up to read the remaining 1 section.
Sign Up Now — Instant Access Already a member? Log inAlways verify citation format against your institution’s current style guide requirements.