Scribd
Upload
931 views6 pages

Compensation As Retention Strategy

Compensation is critical for motivating employees and retaining skilled workers. It constitutes the largest part of employee retention and includes salary, bonuses, health insurance, retirement plans, and other benefits. An effective compensation plan attracts and retains employees by rewarding them financially and encouraging skills development. It also impacts retention by satisfying intrinsic needs for respect, motivation, and meaningful work.

Uploaded by

Harris VS
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
931 views6 pages

Compensation As Retention Strategy

Compensation is critical for motivating employees and retaining skilled workers. It constitutes the largest part of employee retention and includes salary, bonuses, health insurance, retirement plans, and other benefits. An effective compensation plan attracts and retains employees by rewarding them financially and encouraging skills development. It also impacts retention by satisfying intrinsic needs for respect, motivation, and meaningful work.

Uploaded by

Harris VS
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd

COMPENSATION AS RETENTION STRATEGY

COMPENSATION AS RETENTION STRATEGY


Compensation can be critical in motivating employees. Compensation is a reward system. An effective compensation plan helps the organization attract and retain skilled employees. Compensation can also be used to encourage workers to learn new skills and to exhibit appropriate behavior. Compensation constitutes the largest part of the employee retention process.

COMPONENTS
Salary and Monthly wage: It is the biggest component of the compensation package. It includes: 1) Basic wage. 2) House rent allowance. 3) Dearness allowance. 4) City compensatory allowance. Bonus: Bonuses are usually given to the employees at the end of the year or on a festival. Economic Benefits: Economic benefits include paid holidays, leave, travel concession, etc.

Long-Term Incentives: It includes stock options or stock grants. These incentives help retain employees in the firms start-up stage. Health Insurance: Health insurance is of great benefit to the employees. It saves employees money as well as gives them a peace of mind in bad times. After Retirement: It includes payments like EPF (Employee Provident Fund), etc. Miscellaneous Compensation: It may include employee assistance programs, discounts on company products and use of company.

IMPACT OF COMPENSATION EMPLOYEE RETENTION


Employers may use employee incentives and monetary rewards to retain employees. Compensation and benefits may be important factors in the decision to look for employment. Employees have an intrinsic need for respect, motivation and challenging work, which are compelling reasons for seeking employment elsewhere. One of the most effective ways compensation can have a positive impact on employee retention is to construct an employee development plan. A combination of an effective retention strategy has several components that must be addressed in order to retain top employees.

You might also like