Creating Strategy With Criteria

Wooden stool
Vladislav Gajic/Shutterstock

As we have learned through our studies, affordability, legality and employee attraction are three criteria which must be met in order for any compensation strategy to be successful. If a compensation strategy is developed which is not affordable, it will not work. If it is based on shaky legal principles, it will not work. If it is not attractive to the employee marketplace, it will not work. Like the three legged stool, each of these elements must be in place in order to create and support a sustainable system for future success.

Of these three criteria, affordability must be considered in the context of the employer’s overall financial obligations and opportunities. The compensation plan is one piece of a monetary puzzle that the employer must piece together as part its overall revenue and expenditure plan. Financial obligations on the part of many employers include significant loans from financial institutions to cover items such as start-up costs and on-going operational requirements.

With this in mind, Social Capital Partners in Ontario have implemented a ‘Rate Drop Rebate’ program that supports the development of affordable compensation, by providing a rebate on the interest rates for employer loans or lines of credit. This program is only available in three Ontario municipalities at this time.

Click here to see a CBC interview with Bill Young explaining the benefits of the ‘Rate Drop Rebate’ program.

Click here to see how the program works for employers.

This program also addresses the second criteria, legality, by ensuring that appropriate recruitment and selection procedures are in place when making hiring decisions. As for the third criteria, employee attraction, this seems to be the strongest focal point for this program. The targeted employee marketplace for hiring through this program includes students with limited work experience, long-term and older unemployed persons, people with disabilities, newcomers to Canada and unemployed indigenous people.

This program offers evidence that a sustainable compensation strategy can be implemented by ensuring that each one of these three criteria is taken into account.

It also provides evidence that these criteria can support employers in the creation of social good.

Discussion Questions:

  1. After reviewing the link for the Rate Drop Rebate program, what types of recruitment strategies are in place that support employers?
  2. Why do you think the Rate Drop Rebate program should be used in other municipalities?
  3. As a Compensation Specialist, what are the risks and rewards that this program could offer your current workplace?

Work to Earn?

Profit-seeking concept with businessman runs for a bag of money hanging on a fishing tackle
Who is Danny/Shutterstock

“What would you do if your income were taken care of?”

This is the question that many European countries are asking of its citizens. Finland has answered this question by providing a basic guaranteed income to its unemployed workforce as a strategic initiative during challenging and changing economic times.

 

Click here to view the video about the guaranteed income plan in Finland. 

As noted in this video clip, the guaranteed income scheme is an experiment based on the compensation concepts of motivation and rewards. In this case, the reward provided by a guaranteed income for two years should act as a motivator to those who are unemployed. It allows them to take on a low-paying job without having to file reports or pay back the government income.

It seems that this incentive plan is based on the positive pull of income as reward. If a basic income is guaranteed, will a person want to increase the level of their potential rewards by taking on low-paying work without risk of losing the guaranteed pay? Does a guaranteed reward lead to motivation for more rewards?

On the other hand, as mentioned in the clip, if the person wants to stay on the couch and do nothing for two years, they have that choice as well. Will the guaranteed income represent a reward for doing nothing?

The hope, or theory, is that the pull of positive potential should outweigh the drag of negative inertia.

If Canadians were able to build a similar strategy built on possibilities and belief in human potential, how far could it go?

In a Canadian context, if such a plan could be offered to our own unemployed workforce, perhaps it would allow for young workers to take on unpaid internships; for workers displaced by automation to try something new that builds on unused skills; for older workers who have been laid off, to become productive again instead of discarded and left out.

No matter what the outcome will be over the next two years in Finland, this innovative experiment exploring the basic links between the value of work and the value of rewards will likely have impact around the world.

Discussion Questions:

  1. If you had a basic guaranteed income for the next two years, what choices would you make to improve your current situation?
  2. In a Canadian context, how could employers benefit from a basic guaranteed income strategy?
  3. What are the risks associated with this experiment?