Determine how innovations in employee benefits can improve the overall competitive compensation strategy of the organization. Consider these sources: Top Innovative Employee Benefits – Business Benefits Group (bbgbroker.com) Employee Benefits And Compensat
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Employers have been coming up with innovative employee rewards to boost morale and acknowledge employee needs for creativity and personal goal accomplishment. Some of the latest potential employee rewards include increased use of technology, more flexible working options, mandatory quarterly bonuses, and increased well-being options to name a few. There are also opportunities to innovate how rewards are delivered through systems.
Write an eight to ten-page paper in which you:
Determine how innovations in employee benefits can improve the overall competitive compensation strategy of the organization. Consider these sources: Top Innovative Employee Benefits – Business Benefits Group (bbgbroker.com) Employee Benefits And Compensation Ideas: A Guide (vantagecircle.com)Explain how innovative benefits could be tied to specific jobs. Be specific. (Textbook chapters 14 and 15)Critique the effectiveness of equity-based rewards systems versus those with more creative approaches. (Textbook chapter 16)
Discuss the key elements of integrating innovation into a traditional total rewards program. (Textbook chapter 20 and maybe 21)Recommend a process that optimizes an employee-based suggestion program to continually refresh the total rewards of the organization. Hints: Implementing a Successful Employee Suggestion Program | Vetter Blog (getvetter.com) Employee Suggestion Systems | Inc.comUse at least five quality academic resources in this assignment. Note: Wikipedia and other websites do not quality as academic resources.
Steps to Create a Strategic Compensation Strategy
It’s essential to have a strategic compensation approach, as the costs are a significant expense for businesses. In June 2019, the Bureau of Labor Statistics reported that “costs for employee compensation averaged $36.61 per hour worked.” Wages and salaries accounted for 68.6 percent of these costs, and benefits were 31.4 percent.
Here’s what you need to consider when creating your strategy:
1. Ask for Employee Input
Of course, employees aren’t going to be part of the team that determines salaries; however, you can ask for their input about total compensation. Find out what benefits matter most to your workforce. Younger employees may be interested in a daycare subsidy, while older employees might be more focused on retirement plans. By asking for input, you can create an informed strategic compensation approach that fits with your talent management strategy and will satisfy most employees.
2. Benchmark against Competitors
As mentioned above, your compensation plan and employee benefits are a way to attract talent. To remain competitive in your industry and the locations where you conduct operations, take time to benchmark what your competitors offer their employees. You may not be able to match them item for item, but with this information you’ll be able to address gaps during interviews. And, you may be able to get creative about other, lower-cost options you can include in your total compensation package.
3. Allocate Budget
Compensation planning doesn’t occur in a vacuum. Take a realistic look at your company’s human resource and operational budgets. Identify the total amount you can spend on any one employee. Factor in all costs, including taxes, payroll costs, existing benefits, compensation, and bonuses. Include plans for performance or merit increases that will take place as part of annual reviews.
4. Plan for Rewards
As you make your budget, consider how you can use total compensation as a way to engage employees, increase performance, and entice them to stay. For example, you might offer a retirement plan or additional vacation days to employees who have been with the organization for more than a year. You might offer stock options as a bonus after 90 days. This is a way of protecting your budget if employees don’t stay with the organization for a minimum amount of time.
5. Determine Pay Grades
One way to establish a framework for compensation is to determine pay grades based on job position and duties. For example, positions in pay grade one may be for entry-level roles, pay grade two for technician roles, pay grade three for managers, and pay grade four for executives. Having this framework allows an organization to define the amount of pay available based on the job’s requirements and level. Pay grades take the guesswork out of salaries and also provide employees with a range of what they can expect to make for any given role.
6. Confirm Compliance
Compensation strategy provides the big picture for an organization’s pay; however, the manner in which you implement and provide compensation must meet regulations. The Fair Labor Standards Act (FLSA) sets the legal requirements for minimum wage, overtime, equal pay, record-keeping, and child labor. It also has implications regarding payment practices, record-keeping, taxes, paychecks, and withholding allowances. Some states have local compensation-related regulations. Organizations should seek legal counsel to confirm compliance and ensure each compensation strategy meets requirements.
7. Communicate About Total Compensation
When you communicate about total compensation, you want to make sure all employees have access to the information they need. You also want to provide accurate, up-to-date information to avoid issues. The gap between expectations and reality is one of the largest issues between employers and employees that creates dissatisfaction. When you clearly communicate your total compensation strategy, employees know what to expect and appreciate all the benefits you’re providing, in addition to the pay. Be sure that as you communicate about total compensation, you’re using it as an opportunity to celebrate everything that’s included in the package. Employees want all the information available about compensation, so do your best to make the communication engaging. An employee communication software tool can help you deliver timely, engaging, and streamlined compensation communications.
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