Total Rewards Innovation
For many companies, their work force is subjected to conditions that would inevitably lead to strenuous relationships with executive level management and ultimately low retainment rates for employees. The need for employee benefits packages that could satisfy and invoke productivity is vital to the sustainability of any given company. The perks are important because they are often the reason why employees don’t jump ship every time they find themselves frustrated. This exploration of employee benefits packages will discuss how innovation is a vital key to designing a groundbreaking rewards program that will keep employee morale high.
Companies that take out the time to ensure that they attempt to implement new innovative benefits typically have employment that is high in demand. Google is an example of a company that offers its employees a plethora of daily incentives that keep them coming back for more than just a paycheck. For example the company offers its employees a lot of the luxuries that would be deemed monotonous chores outside of the Google building.
Google demonstrates why its so important to focus on ensuring employees lives are made easier. Worrying about food is one thing that many employees would like to do without having to consider being back at a certain time. Google not only provides meals for its employees that have to dedicate longer hours to the business (D'Onfro, 2015). According to an article entitled, “An Inside Look at Google's Best Employee Perks”, Google employees are considerably well fed (D'Onfro, 2015). They have access to healthy breakfast, lunch, and even dinner options if they stay late (D'Onfro, 2015). Not to mention these meals are at no detriment to their paychecks because everything is for free (D'Onfro, 2015). Even if these employees aren’t in the mood for something fulfilling, they have access to coffee and juice bars scattered throughout the campuses (D'Onfro, 2015). Unanimously, the belief is that the convenience of having food offered on campus cannot be unappreciated (D'Onfro, 2015). One Googler commented that they loved the food perk because, "it saves me time and money, and helps me build relationships with my colleagues (D'Onfro, 2015)." This may not be the most innovative but it’s an offering that most companies cannot take credit for.
Netflix is another company that offers a certain level of innovation. Millenials like to be on the go and being weighed down by a 9 to 5 is just another reason why they are likely straying away from the workforce (Mayer, 2017). Noting the fact that employees should have the option to live a little or live a lot, their employees are not restricted by limited days for time off (Mayer, 2017). For new Mothers and Fathers they can get up to a year of paid time off (Mayer, 2017). Those that like to travel or have fickle family situations have the option of having unlimited-time-off for vacation and sick days (Mayer, 2017).
Many employees resign from their positions because they have to out of time off limitations (Mayer, 2017). Considering how only 12% of the U.S. private-sector employees have the ability to utilize paid family leave through their jobs, unlimited-time-off is refreshing (Mayer, 2017). While it is innovative, it is a rare offering; which in turn sets Netflix apart. It is beneficial to employees because they are no longer limited by the need to strategize important dates to take off (Mayer, 2017).
BASF is another company that focuses on work-life balance (Mayer, 2017). They attempt to accommodate the schedule needs of their employees (Mayer, 2017). They also make it easy for its employees to operate without life’s variables setting them back (Mayer, 2017). An example of this is their offering of comprehensive wellness, eldercare and childcare (Mayer, 2017). Many employees feel as though they jobs don’t consider their loved ones (Mayer, 2017). The offering of onsite nurseries ensures that employees have comfort of knowing that their children are safe, secure, and accessible (Mayer, 2017). Not to mention having onsite nurseries offers their employees a convenience that ultimately works in the favor of the company (Mayer, 2017). According to the director of total rewards benefits at BASF, Mollie O’Brien stated that the belief is that, “When [employees] are stress out about what’s going on with their childcare or what’s going on with financial situation, that takes them away from being productive and engaged and happy at work (Mayer, 2017).” This is definitely a beneficial aspect of any total rewards package (Mayer, 2017.
Competitive Compensation Strategy
All things considered, the overall competitive compensation strategy of the organization or any organization that takes into consideration important components within their employee’s life will automatically increase their employee retainment (Mayer, 2017). Many employees struggle with work-life balance (Mayer, 2017). Life’s little twists are often the reason why people either have to resign or lose their jobs (Mayer, 2017). The allure of a company that considers millenials’ need for freedom is of great and increases the want to join a particular organization’s work force (Mayer, 2017). Many employees would gravitate towards companies like Google and Netflix because they offer rewards that are unmatched by other companies. A satisfied workforce increases productivity across the board that ultimately ensures that an organization is able to operate and ultimately move in front of any particular competitor.
Specified Total Rewards Per Job
Innovative benefits could be tied to specific jobs in an effort to ensure that the requirements of certain positions are met with the necessary reward. For example, salary employees often dedicate a large amount of time to a particular organization. Due to this fact, their travel expenses and living accommodations should be taken care of. Employees that have early shifts or work the graveyard shift could be accommodated with complimentary pick-up services.
This would offer a level of convenience that makes the lives of their employees easier.
The idea of tying specific benefits to specific jobs ensures that employees feel valued and supported. Specific jobs require a larger level of commitment. Perfectly tailored perks ensure that each employee feels as though their commitment is worth it.
According to an article, “Tailoring Employee Benefits Packages is the Future of Employee Retention!”, the employee retainment may be a matter of what perks are offered (Flanagan, 2018). Recent studies suggest that it makes even more sense tailor benefits to specific positions as it adds to the increase in retainment of staff over a long-term period (Flanagan, 2018). It is almost as if offering varied perks throughout the corporate ladder gives employees something to look forward to (Flanagan, 2018). Many organizations of today are made up of numerous types of people (Flanagan, 2018). Employees come from varied demographics that include from different generations, backgrounds and lifestyles (Flanagan, 2018). Some persons won’t technically be beneficial to others. With this in consideration, the impact of these variable is clear (Flanagan, 2018). The benefits packages people are searching for when accessing a new employer would need to demonstrate perks that they’d actually be able to utilize (Flanagan, 2018).
A 2017 Workforces Report takes into account the various opinions of employees and ultimately affirms that innovative benefits packages can make or break someone’s interest in a particular organization (Flanagan, 2018). According to this report, 81% of employees stated that focusing improvement on their benefits package would result in an increase in their happiness (Flanagan, 2018). Another 66% of employees stated that their benefits packages were vital to their job satisfaction and their loyalty to a particular employer (Flanagan, 2018). An incredible 75% of employees suggested that they would be likely to accept a position that was at a slightly lower pay rate if the benefits package was substantial (Flanagan, 2018). When asked what employers could do to better their organizations, 47% of employees believed that by improving a benefits package they would in turn offer the support that would ensure employees are able to keep their jobs (Flanagan, 2018). Lastly, 33% of employees have testified to resigning from a job due to the benefits offered not being substantial enough (Flanagan, 2018).
Equity-based vs Creative Rewards Systems
Equity-based rewards systems in comparison to rewards programs that offer a level of creative approach offer something more traditional and seemingly secure total rewards system. For example, tt can be a means of attracting and retaining key personnel when talent is scarce. In more troubled economic times, it can provide additional benefits and help cement loyalty and commitment without using precious cash. Sometimes security is more beneficial than monetary compensation.
Equity-based rewards systems ensure that business are offering their employees a variety of options for benefits (Dinova, 2015). Three of the typical compensation plans include stock options, restricted stock and phantom stock (Dinova, 2015). They each possess varied perks. For the stock option, employees are given an opportunity to purchase stock in a particular organization (Dinova, 2015). This is also done at the fair market value at the date the option is granted (Dinova, 2015). If the company's value increases, the option can be exercised and the stock sold at a profit (Dinova, 2015). Employees who are given direct access to these sorts of perks are being afforded the opportunity to set themselves up for long-term financial stability (Dinova, 2015).
Creative rewards programs that cater to innovation have a better chance of engaging the younger generations that are entering the work force (Dinova, 2015). Millenials tend to harbor a level of entitlement that would warrant a total rewards system that makes them feel appreciated (Dinova, 2015). The implementation of perks like unlimited vacation and sick leave or the ability to cater ones schedule to their personal needs partnered with the long-term incentives of health care or options to buy stock ensures that a total rewards programs can aid in sustaining employee retainment (Dinova, 2015).
The key elements of integrating innovation into a traditional total rewards program is to always keep in consideration how the times are changing and how versatile employees needs may be (Dinova, 2015). Not to mention the element of convenience or a sense of support is vital to ensuring that total rewards programs cover the basis for what employees feel that they need (Dinova, 2015). Something that is important to consider is what detriment these perks have on the interests of the organization and its shareholders (Dinova, 2015). Ideally it considers the needs of all parties and therefore both find that perks offered are at no detriment to the other (Dinova, 2015).
Recommendations
Equity-based rewards systems have stood the test of time and seem to offer a level of security that many jobs no longer offer, however, minor tweaks to the system are beneficial to ensuring that the incoming generations are satisfied with the varied changes within the world around them. A process that work to the benefit of ensuring that total rewards organization continue to adapt to changes amongst its workforce would include the quarterly engagement of employees. Adjustments should be made to the terms of specific employees based on their positions and transitions within their personal lives. Life-work balance is very important. Considering this at all time places focus on an important variable that plays a huge part on why employees are happy with their employers and willing to commit to long-term employment.
References
Dinova, J. (2015, July 8). Equity-based compensation can build loyalty while preserving cash. Retrieved from http://www.northbaybusinessjournal.com/industrynews/4172829-181/equity-based-compensation-can-build-loyalty
D'Onfro, J. (2015, September 21). An Inside Look at Google's Best Employee Perks. Retrieved from https://www.inc.com/business-insider/best-google-benefits.html
Flanagan, J. (2018, April 24). Tailoring Employee Benefits Packages is the Future of Retainment! Retrieved from http://hrwest.org/tailoring-employee-benefits-packages-is-the-future-of-retention/
Mayer, K. (2017, April 17). 10 companies with innovative benefits packages. Retrieved from https://www.benefitnews.com/slideshow/10-companies-with-innovative-benefits-packages#slide-3