Motivated employees are a key driver for an organization's sustainability, performance, and growth. Well-thought-through compensation management that is aligned to the companies objectives and mission has a positive effect on the motivation and engagement of employees (Benabou and Tirole, 2003). Furthermore, studies show that it positively impacts, reduced absenteeism, employee retention, satisfaction, and a positive attitude to work. This supports the theory of researchers that extrinsic motivation has a positive effect on the employee's work morale and attitude. As the needs regarding benefit packages differ over employee generations, regular reviewing of your compensation and benefits packages allows you to win and retain a talented workforce (Adeoye and Elegunde, 2014; Khan et al., 2021).
A compensation analysis using Leapsome’s Compensation and Benefits Survey provides you with insights you need to make data-driven decisions on your compensation management that motivate your employees. The 25 survey items (see listed below) include several types of compensation which are differentiated into the six categories: Reward, Financial Compensation, Workplace Benefits, Learning, and Development Benefits, Health and Insurance Benefits, and Work-Life Balance Benefits. Within the categories, the Items focus on measuring the employee's perceived fairness and transparency of the distribution of payment processes.
Terpstra and Honoree (2003) stated that perceived fairness seems to be more important to employees than the actual amount of pay they receive. However, the actual payment amount also plays a significant role, as the performance and mental health of employees can be impaired if current and future financial obligations, cannot be secured (Adeoye and Elegunde, 2014). Furthermore, additional benefits such as development budgets, flexible working arrangements, or a well-equipped office have become increasingly influential on employee satisfaction.
- I am fairly rewarded (e.g., pay, promotion, training) for my contributions to [Company].
- I can have well-informed and constructive conversations with my manager about pay.
- The process for calculating pay at [Company] seems fair and unbiased.
- I am aware of all the benefits [Company] offers.
- I have a say in the benefit package I am offered, so it reflects my personal needs.
- My salary is sufficient so that I don't have to worry about finances.
- The opportunity to receive a bonus motivates me.
- Doing overtime, is fairly compensated at [Company].
- I am motivated by the investment opportunities [Company] provides (e.g., stock option, VSOP program).
- {Company] tries to create an exciting work environment.
- Team and company events are encouraged and supported at [Company].
- Due to a well equipped office environment, I feel welcome and comfortable at work.
- I am satisfied with the food and beverage benefits (e.g., canteens, healthy snacks, and drinks) [Company] offers.
- I feel like my birthdays or anniversaries are honored.
- I am satisfied with the learning budget [Company] offers.
- I am satisfied with the development trainings offered by [Company].
- The retirement plan provided by [Company] is sufficient.
- The health care benefits provided by [Company] are sufficient.
- {Company] offers sufficient mental health training (e.g., stress management training).
- I am satisfied with the benefits provided by [Company] that support a healthy and active lifestyle (e.g., gym membership).
- I am satisfied with the paid vacation policy offered by [Company].
- The working hour regulations are fair, and I have the flexibility I need.
- It is supported by [Company], that I can combine my career and family responsibilities.
- I have the opportunity to take personal time off from work (e.g., sabbatical, parental leave).
- I have the flexibility to decide if I want to work remotely.
As the survey includes a range of different benefit options, please make sure that you only include the items that are relevant to your organization. To evaluate the results, we recommend using several analytic tools you can find in Leapsome’s survey module. Further guidance on how to effectively use the tools can be found in this article.
Based on the findings from your surveys, you have the chance to review your compensations and benefits plans and if required take action (for example using action items).
Whilst making sure you evaluate your compensation plans, your main objective should be to create a system that is equitable and acceptable to both parties in the employment relationship. That way you will gain a motivated workforce that will retain, and it allows your organization to also stay in a competitive position in the war of talents (Adeoye and Elegunde, 2014).
Literature
Adeoye, Abayomi Olarewaju, and Ayobami Folarin Elegunde. “Compensation Management and Motivation: Cooking Utensils for Organisational Performance.” Mediterranean Journal of Social Sciences 5.27 P1 (2014): 88.
Bénabou, Roland, and Jean Tirole. “Intrinsic and Extrinsic Motivation.” The review of economic studies 70.3 (2003): 489-520.
Khan, Sadaf, Shikha Mishra, and S. A. Ansari. “Role of Organizational Culture in Promoting Employee Development: A Review of Literature.” Linguistics and Culture Review 5.S3 (2021): 585-595. https://doi.org/10.37028/lingcure.v5nS3.1630
Terpstra, David E., and Andre L. Honoree. “The Relative Importance of External, Internal, Individual and Procedural Equity to Pay Satisfaction: Procedural Equity May Be More Important to Employees than Organizations Believe.” Compensation & Benefits Review 35.6 (2003): 67-74. https://doi.org/10.1177/0886368703259005