Rewarding, appreciating, and compensating employees are great ways to keep their morale up. It gives them the incentive to perform better and dedicate more of their loyalty toward the company and its objectives. In fact, the benefits and compensation a company offers can help its employees decide whether they want to stay or leave. More specifically, surveys reveal that almost 75% of all employees factor benefits into their equation of whether to stay or leave a job.
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What an employee considers benefit or compensation can vary. For instance, as per statistics published by Robert Half, 66% of people expect their employers to offer healthcare facilities as benefits, 32% believe a company should offer remote work, 49% want 401k programs, and 39% look for more paid leaves. Two-thirds of the survey respondents said that benefits are an important aspect of how they rate the overall compensation that their employers are offering.
It is evident, therefore, that the retention and motivation of employees have a lot to do with their compensation. Also, there is more than one way to compensate your employees. Here are a few of them:
1. Offer deferred compensation
Also known as deferred comp for short, this is one of the most lucrative benefits a company can offer, much like a 401k that many employees rank as a benefit they would want. In case you are wondering what is deferred comp, it is a monetary benefit that is in addition to the regular salary. This amount is set aside by the employer to be paid at a later date, like the employee’s retirement or any other pre-agreed circumstances.
There are various forms of deferred compensation, including stock-option plans, investments, pensions, and retirement plans. Most deferred compensation incomes are exempted from taxes, which is an additional benefit for both the company and the employee. There are other benefits of this type of compensation too. For instance, with stock options, you as a business are able to hold on to employees as they have a stake in the company too.
2. Compensate them through incentives and salaries
Monetary compensation is the most common and, in most cases, the type of compensation that receives the highest praise from employees. As a business, you are legally obligated to pay a fair salary to every employee that is offered to them, either on a monthly or bi-monthly basis. Compensating employees through salaries and cash incentives, on the other hand, is a way to keep them motivated and retain them for longer.
Salary increments, bonuses, or various other types of payouts are common ways through which you can shell out this compensation. Knowing that a company recognizes and appreciates the efforts its employees are putting in gives team members an urge to work harder and be more loyal to it. Businesses are able to perform much better when their employees are focused, well-compensated, and then incentivized through various benefits.
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3. Provide stipends for various employee expenses
Many employees have expenses that, when taken out of their salaries, give them little spending room for other things. Companies can compensate their employees by instating stipends for some of these expenses. For example, any employee who can excel at their role by surpassing target expectations can be rewarded through a rental, car allowance, or vacation stipend. This additional benefit can vary from one employee to another depending on the individual needs of the person.
If you are a business owner, you can go the extra mile by ascertaining in an informal or even a formal conversation what expenses an employee needs help with. For some, it may not be something outside of work. There are people who want to invest in their professional development and personal learning. As a result of this, the company can offer them a stipend to take certain online courses or travel for a seminar or lecture on the company’s behalf.
You can consider these stipends as investments made into your employees because whether they receive compensations for items unrelated to work or for items that aid their professional growth, the organization benefits from their enhanced knowledge and increased motivation.
4. Paid time off also serves as a great compensation
Offering monetary incentives isn’t the only way to reward a staff member for their efforts. Certain intangible or deferred benefits can also do the trick, depending on what your employees desire from the company. Excessive workloads without proper time off to relax can result in employees getting burnt out and unproductive.
Most employees don’t take vacations or leave because they are afraid of pay cuts. Therefore, a great way for a business to reward certain or all employees for their efforts is through paid time off. Giving them vacation leaves, holiday pay, and paid sick leaves are just a few ways this can be done. You are able to not only motivate employees, but also continue to have them working at their full potential with this relatively small gesture.
5. Food can also be a great compensation
They say that the way to a person’s heart is through their stomach, and food is something that incentivizes everyone. Especially when employees of an organization are concerned, being treated by their company at the end of a hectic workday can mean a lot. Moreover, this can become a constant practice at your company too if you believe in rewarding the team for their efforts constantly.
Many companies offer employees fully funded lunches on a daily basis. On top of that, there are regular retreats that include dinners and other get-togethers involving scrumptious food choices. These may seem like nothing out of the ordinary, but they are sometimes enough for employees. It keeps their morale and energy levels up, lets them know that the organization cares about them, and allows them to devote more effort toward the company.
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Companies have a certain responsibility towards their employees. Even though incentives and compensations are not mandatory or legally binding, they are gestures to show that a business cares about its people. Through compensations, employee retention and loyalty rates go up significantly. At the same time, people within the company become more effective, productive, and satisfied, allowing them to work tirelessly in facilitating the firm to achieve its goals. Employees are any company’s greatest asset; the two grow together or both can fail.