The Perks of Perks

Employee incentive business concept as a group of businessmen and businesswomen running on a track towards a dangling carrot on a moving cable as a financial reward metaphor to motivate for a goal
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When considering the components of a compensation strategy, indirect pay options can provide a significant boost to the value of the overall plan. There is no doubt that both the employer and the employee seek to establish financial stability through competitive base pay components in the form of an annual salary or an hourly wage. Salaries and wages, forming part of the monetary components of the compensation plan, are built on the premise of a fixed amount. As a result, once the compensation plan is put into place, it usually does not need too much tinkering over time, subject to a periodic strategic review.

This is where the value of indirect pay options comes into play. If the monetary plan is bound by  financial constraints and budgets, sometimes the indirect pay plan can expand the options for compensation without incurring significant additional costs. This does not mean that indirect pay plans deserve lesser consideration in the planning stages. In fact, indirect pay plans need a higher level of scrutiny and due diligence in order to ensure that they provide their intended value to the workforce.

Further, the flexibility of indirect pay plans allows for the creation of motivational incentives that can be adapted based on changing organizational need.

A recent article posted by B2C (Business 2 Community) outlines a seven-step approach to using indirect pay plans effectively for short-term gains as part of a long-term rewards system.

Click here to read the article.

As noted in the article, indirect pay plans can include monetary items such as bonuses or commissions which must be included as part of the funding allocated to the organization’s compensation systems. More importantly, non-monetary incentives can provide a creative push that achieves increased productivity and high employee engagement without having a negative impact on the bottom line.

These types of plans depend on the inputs of adaptability, focus, and commitment in order to achieve an output of successful rewards for all.

Discussion Questions:

  1. As the Compensation Specialist for your current organization, outline three short-term non-monetary rewards that would provide effective incentives to boost morale.
  2. What types of measures can the employer put into place to ensure that incentive planning adapts to the changing needs of employees?
  3. In addition to a base salary/hourly wage, what types of incentives are important to you as an employee?

Millennial Considerations

Two creative millenial small business owners working on social media strategy using a digital tablet while sitting at desk
AYAphoto/Shutterstock

The times they are a-changing, for sure.

Much has been written about the challenges facing the millennial generation as its members begin to take greater hold of the economy and the workforce. The millennial worker is someone who has grown up with access to a world of information through digital resources that a person from previous generations simply did not have. As this millennial generation increasingly populates the world of workers and business leaders, they are bringing about a changing view of what constitutes effective rewards and incentives for employment performance.

A recent article, published by Benefits Canada, outlines some positive statistical analysis of the millennial approach to indirect reward plans.

Click here to read the article. 

Previous generations of managers commonly held back group health and dental benefits until employees asked for them. It is apparent that upcoming business leaders recognize the reward potential of offering wellness initiatives from the very beginning of the employment relationship. In order to have a healthy, engaged and constructive workforce, millennials prefer to have a pro-active influence in an employee’s social and physical well-being.

Further, supporting employees on a pro-active wellness path is more affordable at the beginning of a business venture, rather than incurring escalating premiums for an unhealthy workforce later on. It is evident that access to digital resources, such as the statistical evidence provided in this article, has had a great impact on the way benefits are provided. It is also evident that the Human Resources professional has helped to shape this changing workforce view in a positive way. And, as noted in the article, millennial business owners appreciate the value of the Human Resources professional in helping to advise, shape and shift the modern workplace in a constructive way.

Discussion Questions:

  1. What are the top five HR compensation ‘must-haves’ you would advise a small business owner to put into place from the start?
  2. Why do you think flexible benefit plans, as outlined in this article, are attractive to the millennial workforce?
  3. After a year of working in your chosen profession, if you had a choice between a moderate pay increase or full access to an employer paid benefits plan – which would you select? Why?