Compensation and Benefits |
Compensation and Benefits
 Compensation and benefits — what is important to know
All (or nearly all) executives know that a decent compensation package is indispensable to motivate an employee for better performance. What it usually includes:
- base salary,
- performance-based component, and
- social benefits.
Most executives know or suspect that this system of rewards will serve its purpose only if:
- The amount of base salary is linked to how valuable the position is to the organization, and to the extent of the individual employee meeting specific requirements of the position (i.e., grading system)
- Performance-based component is directly linked to work results,
- Social benefits are based on a grading system prioritizing certain categories of employees and placing employees in a larger regional and functional context.
- All these components adequately reflect the local workforce market and average salary levels for the industry and for the region.
Many executives tend to overlook, and some are not even aware of the fact that it is possible to get a higher motivational effect out of a system of rewards that actually costs less to the organization, as long as certain important requirements are met:
- All motivational instruments should be coordinated. The situation that may otherwise occur is donning a reward twice on the same employee for the same accomplishment, since more than one system of reward is at work — or giving none at all.
- Motivation instruments, their make-up and use should be tailored to a specific category of employees depending on organizational hierarchy, their job role and regional context — with the resulting system of rewards that is radically different, and oftentimes the direct opposite of its counterpart accepted for another category of employees. Thus, sophisticated duties and responsibilities of a manager or an executive cannot be acknowledged on the same par with those of a «linear» specialist, and the other way round.
- Compensation policy must be transparent and seen as fair by all employees of the organization. All differences in compensation between employee groups must be based on objective and undisputable differences between their job descriptions, including the amount of responsibility, different work conditions, etc.
- The entire staff must be familiar with the general principles of assigning rewards, in addition to every employee being familiar with his or her individual motivation plan.
Our strategy
Over the years we have developed a unique strategy of putting together efficient systems of employee motivation. Our approach combines feasibility analysis, psychological and mathematical case analysis, helping organizations to circumnavigate any potential negative results and get more motivational value out of every bit of the resources they spend on rewarding personnel within their motivation systems.
How we do it:
- We undertake a complete review of the existing compensation policy within the organization and evaluate its current functionality and efficiency.
- We analyze and stratify personnel, putting employees into categories with a specific make-up of rewards for each category based on the nature of their job and conditions under which they are expected to perform.
- We align the company's compensation policy with its business strategy and other policies affecting human resources.
- We develop mechanisms for implementing the new system of rewards. Working together with the company's management, we plan and organize «demo's» and PR events to make employees comfortable and confident about the new system.
- We closely monitor the process, as the new system is being put into place, performing an analysis of its actual motivational effect.
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