Innovations of Employee Benefits
Business leaders are involved in activities that offer them competitive advantages and increased market share in the present dynamic business environment. It is evident that businesses are usually keen about what their competitors are doing with an aim of doing better than them. Every business wants to attract and retain key experts that are said to be engines for successful and better performances by organizations. But how are they doing this? Business leaders are on a voyage, discovering succeeding strategies to establish and implement programs that will prompt competitiveness of their workers within their industries.
The most important goal for an employment compensation strategy is to offer better rewards for right employee actions for success of the company. In order to make competitive compensation packages for employees, companies need to consider what their rivals are offering so that they do not end up running into losses by offering more than the equilibrium package in the industry or offering less than the minimum, because this will make it impossible for them to recruit and retain staff.
Best packages are sometimes those that are preferred by employees while at the same time appear to be competitive in the particular industry. One advantage with compensation schemes is that they are able to underpin organizational culture, something that is highly desired by companies. The government governs every aspect of employee compensation within the public sector. In many instances, this leaves no room for innovative ideas towards formulation of important compensations schemes. Companies that are highly innovative in engaging their employees record high returns that are sometimes double those of rival companies which do not engage their employees adequately (Pollitt, 2081)
The first way to creatively engage your skilful employees is by putting them in a position where they can have direct contact with consumers of their products. In many industries, employees design products and dispatch them for sale, yet they have no idea about the impact of the products on the lives of their end users (Grant, 2007; Grant, 2008). A good example is the automotive industry where automotive engineers design cars of all kinds worldwide but they never gets the chance to have direct feedback from drivers of the cars, authors as well compose many pieces of literature to millions of faceless readers but never meets them for feedback.
Meeting end users as a product developer has been known to enhance prosocial motivation as well as perspective taking. According to a psychological research, when exposed to people in need, a product manufacturer is able to develop empathy and prosocial motivation which is important in making tailor-made products for them (Batson & Shaw, 1991). When employees in a company are exposed to their product end users, they are able to witness how their work is impacting on their lives thus creating a stronger anxiety for assisting them (prosocial motivation). Similarly, they are able to have a stronger comprehension of their tastes and perspectives (perspective-taking). In return, this strategy has the effect of making employees work extra harder and smart and become more effective.
The second way of how innovations can enhance overall competitive compensation strategy of the organization is through establishment of health benefit designs where employees can benefit from health insurance schemes. Organizations can commit to take care of employees health care needs, this way employees do not have to be worried about their health needs and those of their families. This gives them enough time to concentrate on their jobs and improve on their overall effectiveness and efficiency. Where employees happen to use their finances to take care of their health while on holidays and vacations, organizations need to introduce arrangements for health reimbursements. This strategy has the aim of regulating expenditure on health by employees of an organization while increasing their efficiency at work place.
Alternatively, there are other organizations that have devised strategies aimed at projecting the work environment as a place of recreation besides normal routine job. In this case, they have introduced wellness programs. Workers get a chance to engage in fitness programs before beginning their work or at the end of work before they retreat home. In this light, organsation may employ fitness and wellness experts to offer advice to employees on how to take care of their overall fitness. Workers may feel motivated to work hard and remain in the organization rather than move to other organizations.
Benefits and Specific Jobs
As far as employee compensation is concerned, most managers struggle with deciding what to offer as best packages, perhaps an easier approach to this issue should be how good the compensation package should look like. It is now evident that compensation packages are directly linked to business structures, workers recruitment and retentions, motivation at work, better performance, effective feedback and job satisfaction. Potential employees give first priority to kinds of employment packages offered by an organization before choosing to join it. This is because, compensation in organization does not merely represent the way payments are better but how valuable workers are perceived in the organsation.
One of the ways to offer employee compensation is patting them on the back for every great job done. At Command Software, a company the specializes in making antivirus softwares, the manager Dyan Dyer came up with an award scheme for random acts of benevolence shown by its employees. One of the employees who once won the award had accommodated a new German employee, assisting him acclimatize with the American climate. In her recognition, the employee had been given a certificate of recognition and a porcelain angel designated for her desk. In rerun such awards and other kinds of recognition have the effect of increasing employee loyalty to the organization and thus contributing to the overall success of the organization (Caggiano, 2014)
Different industries have different employee compensation strategies, for instance, Fiamnini; a president of a public relations company in Seattle uses a different approach to his employees to make them effective. At one point, the president winds up business to accompany his seven employees for a movie. He says that for at least four times in a year, his employee gets an opportunity to don their pagers, Fiamini admits that this strategy enables him to remain competitive since his workers end up committing their efforts in the organization order to get more rewards and offers. In addition, the company provides weekly lunches that are catered for alongside daily supplies of candy, and other beverages like juice and soda. Fiamini and associates has managed to remain relevant and efficient in a market where other established rivals like Microsoft have effectively continued to stamp authority.
For some companies, having flexible work schedules has proved to be a valuable and reliable employee compensation perk. For instance, Kaufer Miller Communications is an agency that offers communication services to its clients in Seattle. Mr. Kaufer, the company proprietor realized that there was an employee that was frequently being distracted by long distance commuting. To solved this issue and help the employee manage his work obligations, Kaufer engaged the employee in designing a work schedule that required the employee to work for only ten hours a week with an off-day on Fridays. In addition he also helped set up a home office for another employee so that he could be in a position to be moving to see her fianc?e who was based in Washington, D.C. (Caggiano, 2014).
In most sectors, one of the easiest strategies for employment motivation is availing chances for promotion and advancement. In this case, organizations do not have to hire different employees to fill up top level management positions; instead they fill vacancies from within. This is usually the case with Half Price Books, an organization that sells different kinds of books and journals. The owner of the company, Sharon Anderson takes this approach in filling up management position, she promotes from within.
She says that employees who stay in the company for a long period of time gets the chance to raise and take up leadership roles. This strategy she says offers new employees the motivation to stay and remain with the company for long. Fiamini also uses almost a similar strategy, in his company, workers that are able to bill 1200 hours in a single year coupled with establishing at least two new business contacts gets their way smiling into the bank due to unimaginable salary increases.
Equity-based Versus Innovative Rewards Programs
Most companies in the United States use equity rewards to encourage their employees to perform better and stay longer in their companies. Equity compensation takes many forms; there are companies that use them as employee motivation schemes while others use them just as benefits to their long serving employees.
Equity rewards entail actual issuance of company stocks. The grant is designed to look like a sale and the securities are given with respect to the time that an employee stays within the organization. There are cases where the employee taking the reward only signs a promissory note to compensate for the securities; in return the note is redeemed through payments on bonuses as long as the note remains valid. In other stances, the note may be foregone for a period of time depending on the performance of the employee in the organization. In the event a company is being sold or placed in an IPO, selling of securities by employee represents their capital gain. As a way of rewarding employees for their efforts in enabling the company arrive at an IPO or selling point, all the securities and stocks that are unvested at that time actually vest at the period of effecting the transaction. This gives a clear distinction between equity and innovative rewards.
The first difference is that innovative reward programs have a way of encouraging competition among workers instead of collaboration. Innovative reward programs giving wards to best performing employee makes employees want to outdo each other. Companies using this program do not have teamwork. On the other hand, companies that use equity compensation encourage their workers to work in teams. Workers are motivated and inspired by fellow workers who are enjoying the workers after having stayed in the companies for a long period of time. When high performing workers are compensated it fuels feeling of jealous in the work force. This strategy does not consider the fact that people are endowed differently in terms of skills and talents. Workers who give crucial inputs and remains unnoticed at the end of the day for purposes of rewarding end up feeling unvalued and unappreciated. On the other, equity rewarding offers a team or group of employees rewards after their cumulative efforts and long service to the organization(Solomon, & podgursky, n.d).
The second difference is that innovative rewards can sometimes be biased. Selecting people to receive holiday packages at the end of the year can be challenging for an organization. This is practical especially in a case where a single lucrative reward is available for one employee in the end year party. Sometimes other employees whose efforts were exemplary may end up being dejected because at the end of the day, the reward is meant for one person only. This leads to demotivation and lowering of employee morale and could cause employee turnover. Equity compensation on the other hand deals with many employees at the same time. Selecting employees for equity rewarding is simple, this is because, in the event stocks are to be availed to workers who have shown loyalty and long term service to the company it’s a only a matter of records to reveal employment dates to the latter. The process does not involve personal judgments and hence it is free and fair for all workers (Solomon, & podgursky, n.d).
Another notable difference with equity based rewards is that they do not encourage innovation and creativity. Workers are subjected to old practices that have been used over time. The strategy seems to be less concerned with new ways of doing things as well as individual talents. Innovative rewards encourage workers to use all means in order to attain the needed value for the company provided that it is line with the company’s policies for good practice.
Workers who are compensated based on their innovativeness have a wide option for approaching work obligations. Perhaps, this is the reason why innovative rewards are mostly associated with private companies and not the public sector. Government institutions are known for red tapes procedures making crucial decisions about company performance. This kind of work environment does not encourage creative and strategic thinking towards solving and implementing policies for rapid results initiatives.
In terms of costs, the amount of resources used to manage innovative rewards is high compared to equity rewards. This is because; the company needs to spend a lot in order to avoid monotony of rewards. For instance, giving holiday vacations to a group of high performing workers can be expensive compared to selling the offering company stocks. In the first one, a company has to have a large financial muscle compared to the second one.
The first way major way that innovative components can be integrated into the traditional rewards program is by intentional with your reason for innovating the reward program. As a manager, you need to make clear your corporate mission and vision, outlining the necessary steps towards achieving it. Showing the steps that are necessary to reach the goal enables employees to maintain their focus and work towards it (Kaplan, 2014).
Secondly, you need to provide a clear structure that will cover up for all the hours needed in the job. You need to ensure that the organization meets its goals by doing extra work using extra time. This means that you may have to design a way in which extra hours by employees into the job is effectively compensated. You have to find out the number of workers that a particular employee requires in the company, then work out a plan of how you can engage the worker on part time basis. This should be done with caution so that employees do not later become slaves to the job. To avoid this create a good compensation framework for any extra hours spent on the job.
Alternatively, it is important to seek consultancy advice so as to come up with peculiar compensations schemes that can offer you a cutting edge in the industry, giving you the much needed competitive advantage.
Keeping Total Rewards Fresh
Giving the employees a voice in organizational management practice is important for success. A clearly documented program for your employee’s suggestion that is initiated by the organization amidst full commitment and clarity with a clear communication framework can positively impact on the motivation of employees and their overall enthusiasm. On the contrary, a suggestion program that is hastily prepared and launched can make employers lose morale and develop ill motivations for work. In such a case, the organization risks failing to meet its goals and may be out smarten by its rivals.
The first step towards making an effective employee suggestion program for an organization is to evaluate whether the program itself is of importance to the organsation. As a manager, it’s important to find out whether the organization is receiving any thoughtful ideas and suggestions. Establish whether suggestions from employees are already percolating to the surface from formal staff meetings to informal conversations among company employees. You may have to schedule departmental meetings in order to harness other employee’s suggestions about the program and how best it can be established in the organization (Wojcik, 2013).
The second step before launching the program is creating a suggestion review team tasked with reviewing the suggestions and giving recommendations to the management (Heathfield, 2014). The team must not comprise of top level managers because this will give the impression that it is out of touch. Instead, it should be designed to be all-inclusive having equal representation from top, middle and low level workers. Such a team will have the support of all employees in the organization leading to collaboration in generating ideas which are crucial for the success of the organization in the present and future endeavors.
- Batson, C. D., & Shaw, L. L. (1991). Evidence for altruism: Toward a plurality of prosocial motives. Psychological Inquiry, 2, 107-122.
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Solomon, L, C & podgursky, M. (n.d). The Pros and Cons of Performance Based Compensation. Retrieved from, < http://web.missouri.edu/~podgurskym/articles/files/Pros_cons.pdf >
Wojcik, J. (2013). Large companies’ innovative benefits programs help midsize firms expand offerings. Retrieved from, < https://www.businessinsurance.com/article/20131229/NEWS05/131229948 >