With U.S. employment heating up, Ingram Micro HR expert Chad Winer, director of compensation, suggests revisiting your rewards program and implementing the following best practices.
1. Gain strategic benefits. Total rewards, which include compensation, incentives and benefits, are typically a company’s most significant balance sheet cost. Use them to drive short- and long-term business results, advises Winer.
2. Evaluate company maturity. Devise rewards that are appropriate to your organization’s growth life cycle. For example, start-ups may need programs weighted more toward incentives than established firms with a greater market share.
3. Align to company goals. Determine how rewards contribute to short- and long-term business strategies and goals, and then design reward components to match.
4. Honor corporate culture. Whether your firm is results-oriented or process-focused, establish reward components to channel behaviors appropriately. This way, company goals and objectives are clearly supported.
5. Respect demographics. Baby boomers and some GenXers may value stability, retirement plans and consistent paychecks whereas millennials likely will want flexible schedules, autonomy and collaboration. Tailor rewards to match.
6. Survey the competition. Know what your competitors are offering and decide how you’ll differentiate yourself, such as with innovative health benefits or compelling commissions. Effective rewards are critical to talent acquisition and retention.
7. Stay within budget. Regardless of employee popularity, some rewards may not provide adequate return on investment.
8. Be trend-aware. Bonuses and other incentives are trending higher as they are flexible, customizable and address measurable objectives. Healthcare exchanges and wellness programs are gaining popularity for optimizing benefits and driving productivity.
9. Keep it simple. Your employees should be able to clearly articulate their total rewards in an “elevator speech” of a minute or less. If they can’t, re-evaluate and make course corrections.
10. Market, market, market. The most overlooked rewards strategy component is marketing it to employees and potential candidates. Poor marketing eventually destroys a strategy’s effectiveness, with potentially dire business impacts. Involve your marketing team with developing branding, communication and training programs.