Saturday, March 22, 2014

Compensation….Give me more…but why & how??

There is lot of discussion and research on motivation of employees. What actually drive them to stay in the organization is always a question. Human being will have different aspirations, inclinations and drive in their life, however fundamentally they work for their livelihood. They want to make their and their family life easy and future safe and everybody should do that. During compensation review season, there is lot of discussion around water cooler. Salaries of friends are publicly discussed and sometimes people are unhappy with the rise others get and not what they get.  As per the Kenexa research only 51% employees in multinational companies feel that they are fairly paid.   

We all know as well in our practice that we can never have all groups or echelons in the organization swing with the music, 100%, all the time. Any slight modification of the status quo would move the entire team back to some kind of "unfreezing state". When things get pretty tough in the marketplace, and the employees are required to "stretch" themselves, then it is but logical that people will naturally ask for more pay and anything more compensatory for the efforts and hard work they put in. If your Company is transparent enough to discuss business performance, I reckon a couple of these options are areas you may want to explore:
  • Regular Business Performance meetings cum discussions with key line managers, particularly those who are directly supervising people.
  • Open up lines for people to know where they are business performance-wise and bring them subtly to industry benchmarks on compensation.
  • Include in your communication campaigns total "Human Capital Investment" on every employee, for instance, how much is the value your organization invests on an individual employee should you assign a dollar value for everything an employee enjoys, from total cash pay to include development and training costs, other perks, holiday breaks, travel opportunities, that are paid for, and all other "fringes". One caveat though, unless your assessment says otherwise, your organization should be "ripe" for openness and transparency on all the necessary information that will communicate "What's in it for them?"

You may want to add and even increase another cornerstone in your design in the area of "Variable Incentives". Incentive by design would inform people early on in the business calendar what needs to be achieved, and what are the available "carrots" if they "exceed" the hurdles. These schemes must be deliberately implemented to ensure that you "reward" only what your organization believes is worth "rewarding" and should not be misconstrued as a great expectations exercise. Only the best, and your people would know who they are, will drive and propel them beyond what is required.

Also read "Compensation Philosophy" on

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