A majority of human resources professionals and top management appear to believe that employees are likely to always believe that they are under paid in employee surveys. However, detailed research suggests this is not the entire truth.
Additionally, human resources professional have also considered salaries in comparison with skill level to determine how employees perform based on their wage level. The results of these studies show that employees who feel that they are underpaid relative to their skill levels will not perform as well as they would if they always feel that they were appropriately compensated.
The effect of compensation on employee job satisfaction has also been studied. Not surprisingly, employees who are paid more are more satisfied with their jobs and less inclined to leave their employers—up to a certain point (i.e., salary level). While the amount of that exact point is frequently debated, experts generally agree that somewhere beyond the ballpark of a six-figure salary range reflects diminishing returns (i.e., no additional benefit to the organization for paying the individual more).
In such a scenario, it is very important for human resource professional to understand their organization, employee and industry culture to determine Non-Monetary Employee Compensation to motivate their employees. The Non-Monetary Employee Compensation can also be determined by participating in various compensation and benefits survey and mapping exercise. Non-monetary compensations (e.g., benefits) are essential in recruiting skilled employees and maintaining a satisfied workforce.
Some of the benefits like educational assistance, rewards for additional certificates, assistance for executive programs, reimbursement for general training courses and providing mentoring and counseling can achieve career growth benefits. These benefits focus on the professional and intellectual growth of employees. By providing such benefits to its employees, organizations exhibit a keen interest in enhancing their knowledge and learning. It also tends to reflect that the employer is focusing on building a long-term and mutually-beneficial association with its employees by investing in their knowledge and skills. Employees who are eager to learn and grow find such workplaces to be most attractive.
Companies also provide paid and unpaid parental leave, day care / crèche, flexi work hours, monetary assistance for day care/ elder care and vacation time to achieve work – life quality for its employees. Benefits such as part-time working hours or work-from-home opportunities which touch upon the lives of employees beyond work, fall under work-life benefits. These benefits help the employers to contribute to enhancing the quality of their employees’ lives. Organizations that include such benefits in their compensation plans tend to build a more empathetic relationship with their workforce. According to a Harvard Business Review Survey, employees have ranked benefits favoring ‘work-life balance’ second, after healthcare.
Further incentive benefits such as employees stock ownership plan, Profit sharing scheme, Pension or savings plan like Superannuation or PF trust, Company car, Housing loan assistance focus on assisting the employees in their financial growth. ESOPs, contribution retirement plans, and other saving plans are no more considered as just fringe or secondary benefits. Companies are using these financial benefits to reward and retain their high potential and ambitious employees. Infosys is a good example where an organization has gone ahead and made its employees a part of its profits by offering ESOPs to them.
Apart from this there are many other fringe benefits such as profit bonus, gratuity, leave with pay, housing allowance, meals, medical coverage for employees and his immediate family, group term insurance and personal accident policy. A fact based approach will assist Employers and human resource professional to provide a structured monetary or non-monetary fringe benefits to their employees and thereby foster a more engaged, committed and productive environment at work.
C ASPECT also specializes in providing compensation and benefits mapping data for its clients across industries.
–Shubhangini Shetty – COO – C ASPECT