Importance of Compensation in the Workplace
Smart employers know that keeping quality employees requires providing the right compensation and benefits package. Compensation includes wages, salaries, bonuses and commission structures. Employers shouldn't ignore the benefits portion of employee compensation and benefits, because the benefits sweeten employment contracts with the priorities that most employees need.
Attracting Top Talent
People are always looking to put themselves in the best possible position financially. Those who are worth a specific salary amount often know their value and will seek a position that pays accordingly. Do research on what your competitor's compensation and benefits packages look like. Make sure you offer a similar package to your potential employees so that you attract the best candidates for your company. Hiring the right candidate the first time reduces recruiting costs and helps free up business owners for other tasks.
Increased Employee Motivation
Properly compensating employees shows you value them as workers and as human beings. When people feel valued, they feel better about coming in to work. Overall company morale increases and people are motivated to come to work and do a good job. Additionally, when employees know there are bonuses or commissions, they are increasingly motivated to deliver grander results. Bonus and commission compensation plans become a focal point for success.
Boost Employee Loyalty
When employees are being paid well and are happy, they're likely to stay with the company. Proper compensation is one factor why employees remain with employers. Loyalty means that business owners don't need to continue to spend time, money and energy on recruiting new candidates. Employee retention and low-turnover rates are great for employers who cultivate a team that knows what to do. That team is also motivated to be part of the team, and they get the job done well.
Increased Productivity and Profitability
Happy employees are productive employees. Productivity in relation to compensation starts with employees feeling valued which increases motivation and loyalty. Not only are employees more motivated to do a good job, but also, the longer people are with the company, the more they know and the more efficient they become. All of this leads to increased productivity.
Job Satisfaction So People Stay
Creating the right compensation plan leads to stronger job satisfaction. The right compensation plan includes benefits, along with all the other bonuses available. Employees often boast about holiday bonuses or they keenly watch how the company stock performs because they have stock options. The right compensation program invests employees into the work being done, which gives them a stronger sense of satisfaction when the company succeeds. They know they will be rewarded for their efforts; everyone likes to be appreciated.
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Writer Bio
With more than 15 years of small business ownership including owning a State Farm agency in Southern California, Kimberlee understands the needs of business owners first hand. When not writing, Kimberlee enjoys chasing waterfalls with her son in Hawaii.