Innovations in Employee Benefits and the Overall Competitive Compensation Strategy - Essay Example

Number: Paper: Table of Contents Innovations in employee benefits and the overall competitive compensation strategy 3 Innovative benefits tied to specific jobs 4 Equity-based rewards systems versus other creative approaches 5 Integrating innovation into a traditional total rewards program 6 Recommendations 7 References 9 Innovations in employee benefits and the overall competitive compensation strategy The present business environment is evolving at a rapid pace and is continuous in nature. Therefore, business organizations should identify and understand the changing needs of business to sustain in the long run. One of the major issues in the current context is ensuring an efficient workforce. Hence it is obvious that companies are required to take up certain measures in order to stabilize their workforce. Companies should ensure comprehensive benefits for the employees which can be done by understanding employee needs. Employees should be motivated by designing innovative strategies to enhance their commitment to work. This will help to increase employee performance. Companies should also recognize the requirements of the diversified work force. For instance, with the changing times, women have started engaging themselves more to the corporate world, yet their responsibilities differ from men. Hence, an organization must look into such factors. Innovative benefits are therefore essential for an employee to survive in an organization (Botha, Bussin & De Swardt, 2011). Acquiring a pool of skilled and talented employees has become a difficult job for the companies due to the increasing competition in the market. There is also problem associated with retention of efficient employees. Top talents can be retained by offering a pay package that would cater to all employee needs. For the long term growth of the company, the HR strategies should be designed efficiently. This will also have an effect on the compensation strategy. A company is differentiated from other companies on the basis of its strategies related to compensations. Such strategies determine the ability of a company to acquire skilled and efficient employees. Employees will no doubt be attracted to companies who provide exceptional pay package and have a balanced compensation strategy. Overall competitive compensation strategy is often influenced by innovations in employee benefits. The innovative benefits should thus be integrated with compensation strategy. It is enhanced by making progress through financial outcomes. The benefits provided to the employees should be more logical and must add some value to employees work and life. Employee benefits associated with health and medical facilities significantly influence the compensation strategy. Management of future medical expenses of an employee can be included in the employee benefit plan. Innovative strategies can be used to enhance employee benefit plans. This will indirectly influence a company’s compensation strategy. The company would be able to maintain a balance in its workforce. The competitive compensation approach of the company can be positively influenced if efficient benefit plans are designed. This is due to the fact that strategies related to employee benefits contribute to the growth of an organization directly by enhancing skills of the employee (Campbell, 2000). Innovative benefits tied to specific jobs Innovative benefits are often tied to specific jobs. Employee satisfaction can be improved by customized benefit plans. The plan must cater to the need of every employee. The plan must concentrate on various aspects of worker needs and must be justified to serve the purpose of different jobs. For instance, for aged employees, retirement benefits and medical facilities are imperative. However, young employees do not put emphasis to such plans (Cardon & Stevens, 2004). In case the organization deals with work related to computer technology and the employees working in that company are continuously exposed to such conditions, then the organization must provide the employees with insurance that would help them to take care of vision problems. Companies also provide the employees with gym membership so that the employees are not engaged in table work only. This would help the employees to evade health problems related to obesity. Companies also provide with transportation allowance or transport facilities to employees who have to work in odd hours. Companies also provide employees with various kinds of health insurances in case the work has detrimental health effects on an employee. Such kinds of work mostly prevail in factories and industries who work with chemicals and other raw material which are injurious to health. Thus, it can be concluded that innovative benefits are designed keeping in mind the nature of work (Chapman & Kelliher, 2011). Equity-based rewards systems versus other creative approaches Rewards which come in the form of remuneration, pay for working overtime, incentives in the form of commission, pay due to good performance, paid leave, additional benefits in the form of bonus and company profit sharing are all included under the system of equity based rewards. Rewards in the form of insurances for health, annuity and retirement policies, personal vehicle from the company, benefits associated with heath care, membership to different clubs, food requirements at subsidized rate and other special facilities related to entertainment comes under alternative creative benefits that the employees enjoy (Botha, Bussin & De Swardt, 2011). Performance of an employee is significantly enhanced by rewards based on equity. The employees can avail various plans which are directly related to stock of the company. The rewards come in the form of employee stock ownership plan, stock awards, employee stock purchase plan etc. This form of reward helps to integrate the efforts of the employees with the company. This in turn has an effect on the company’s shareholders. The equity based reward system is an efficient way of rewarding employees as it helps to encourage employees by motivating them. Cash management is done more efficiently by the company. This rewarding system helps the companies to enjoy advantages related to tax. Employees are thus easily retained when a company follows such a rewarding system (Collins & Clark, 2003). The other creative benefits differ from the above system in various aspects. The employers are in a position to design cost effective benefit plans through the creative approaches. Employees are motivated through such plans and their commitment to the organization increases eventually. The creative benefits also help to enhance the employer- employee relationship by ensuring effective communication between them. Employees also get more personal time.            All the above methods are designed to encourage and promote motivation among employees. Thus, they become more committed to work. Companies also do not suffer from the fear of losing skilled employees. Selecting the appropriate benefit plan depends on company’s objective and its business undertakings. Thus both the benefit plans are effective and the level of efficiency varies with the objectives set by the company. A proper strategy of efficient communication is imperative for the success of the benefit plans. Employees should also do their part by providing support to the organization by working efficiently to achieve the targeted goals (Coyle-Shapiro & Shore, 2007). Integrating innovation into a traditional total rewards program Growth of business is often related to employee’s commitment and dedication to work. However, employees cannot be motivated properly through the traditional form of total rewards program. The traditional methods lack innovation and creativity and hence they fail to cater employee satisfaction. It is very essential for a company to see that its employees are satisfied. Satisfaction is an important criterion that enhances employee productivity. It is imperative for the company to realize that employees cannot be satisfied by only providing benefits in monetary terms. The company should adopt various other alternative ways to satisfy employees (Cole & Flint, 2004).         Traditional pay method mainly focuses on providing health befits to employees. Benefit plans should also be designed to fit the requirements of individual employees. For instance, many employers provide special benefits to employees. Sometimes employees are allowed to bring their amenities that might enhance work performance. They are also provided with various recreational facilities. Various programs like “Fun at work” (Jensen, McMullen & Stark, 2007) are also held. Proper career guidance should be provided to the employees. Thus, traditional methods can be integrated with innovative benefit programs by strategizing plans effectively. Recommendations Organizations should design and adopt a process that would regularly revive the total rewards and would eventually capitalize on the employee based proposition. It would be recommended that the process should concentrate on the business operations and ensure substantial opportunities for growth. The employees should be given the chance to lead a team. This would give them a sense of responsibility and make them committed to organization goals. The whole process should be updated with technological support. The process should aim at motivating employees to ensure sustainable growth of the company in the long run (Lambert, 2000). There should be some value addition through the process. The strategies should also be designed in a cost effective way. The process should provide outstanding service to not only the employees but also all the individuals associated with the organization. Organization’s success depends on the skills of its employees. So it should adopt an efficient employee selection method. The business operations of the organization should provide with sufficient financial support. The labor force should be viewed as a prospective investment which would result in outcomes that would be beneficial to the organization if such investments are planned properly. The size of such investment should be determined appropriately so that it does not act as a burden to the financial position of the company. The companies should create a structure that would help employees to adapt with the continuous changes in the business environment (San, Theen & Heng, 2012). References Botha, A., Bussin, M. & De Swardt, L. (2011). An employer brand predictive model for talent attraction and retention: original research. SA Journal of Human Resource Management, 9(1), 1-12. Campbell, D. J. (2000). The proactive employee: Managing workplace initiative. The Academy of Management Executive, 14(3), 52-66. Cardon, M. S. & Stevens, C. E. (2004). Managing human resources in small organizations: what do we know?. Human Resource Management review, 14(3), 295-323. Chapman, J. & Kelliher, C. (2011). Influences on reward mix determination: reward consultants perspectives. Employee Relations, 33(2), 121-139. Cole, N. D. & Flint, D. H. (2004). Perceptions of distributive and procedural justice in employee benefits: flexible versus traditional benefit plans. Journal of Managerial Psychology, 19(1), 19-40. Collins, C. J. & Clark, K. D. (2003). Strategic human resource practices, top management team social networks, and firm performance: The role of human resource practices in creating organizational competitive advantage. Academy of management Journal, 46(6), 740-751. Coyle-Shapiro, J. A. & Shore, L. M. (2007). The employee–organization relationship: Where do we go from here? Human Resource Management Review, 17(2), 166-179. Jensen, D., McMullen, T. & Stark, M. (2007). The manager’s guide to rewards. New York: Amacom. Lambert, S. J. (2000). Added benefits: The link between work-life benefits and organizational citizenship behavior. Academy of Management Journal, 43(5), 801-815. San, O., Theen, Y. & Heng, T. (2012). The reward strategy and performance measurement (evidence from Malaysian insurance companies). International Journal of Business, Humanities and Technology, 2(1), 211-223. Read More