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Designer pay packages need of the day
Compensation packages designed on broad guidelines for the entire organisation have been the practice for ages now. Much to their dismay, many corporate houses are recognising that the “one size fits all” no longer works to attract and retain talent. Customised offerings are ruling the roost in every sphere. Employers cannot lag far behind. Designer pay packages are the latest on the compensation front.
It is being widely recognised that employee performance significantly impacts the bottom line and the battle for top talent is getting fiercer by the day. Many top-notch companies are thinking of new ways to get the best out of their existing employees and attracting new talent. The human resource management strategies are undergoing a sea change and more customised pay, training and benefit programmes are on the offer.
Companies now prefer an individualised people management approach wherein innovative practices are being tailored to play to individual needs. Different classifications of employees based on their job roles, value to the company, tastes and preferences are gaining ground. Personalised packages to boost the productivity of employees of each class are the logical next step. Changing traditional human resource practices is no mean task. Fairness and efficiency are fundamental to the success of any people management plan and cannot be overlooked. If a decision is taken to treat individual employees differently, a balancing act is a must to see that employee sentiments are not adversely affected. Also, complete customisation is not possible on account of fundamental labour rules and government regulations profess equality and exist to protect employee interests. Therefore, companies are designing new policies that will appeal to the modern generation of employees while retaining the essence of traditional principles. Some of the best practices adopted by pioneers in the field of contemporary people management include:
Classification: Companies group employees into different categories to understand their concerns and cater to their needs better. High performers occupying critical job roles are classified as “A players”. Special offers such as fast tracking, customised career development opportunities, training programmes from top universities, attractive pay packets with unique perks and fringe benefits are the latest trends in harnessing top talent. Older work force and women employees are given certain additional benefits in terms of flexible work schedules, work from home options and the like.
Gamut of choices: The compensation and benefit plans are so designed to include a variety of options. Employees are given the freedom to choose a plan that suits them the best. When given an opportunity to pick, the employee can opt for the best value package that meets his individual needs.
This in turn helps the company to garner higher commitment and loyalty from the employee. Some companies go to the extent of providing choices on the physical setting of the work place. They can choose from private cabin, team room or a home office.
Flexibility: A small number of broad salary ranges are replacing traditional job classifications and pay grades. Managers are allotted a fixed amount and given greater discretion powers to fix the pay scales of their direct reports based on merit and performance calibre. In some organisations employees are given the freedom to choose from management-focused roles and technical specialist jobs with each career track having its own pay and benefit plan.
Personalised reward programs: Some companies try to find out about personal preferences of their employees. The employees are requested to come up with items they like through a “motivational study”. By studying what reinforces superior performance, the company tailors employee reward programmes accordingly. Synchronising the reward policies both monetary and non-monetary with individual preferences can be an effective motivator to employees. Today the work force is more diverse in terms of culture, education and career ambitions. It is thus imperative that companies fathom their varied needs and find means to accommodate them to gain competitive advantage.
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N. PURNIMA SRIKRISHNA
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