We recently sat down with Kari Meillat, KMA Compensation Manager, to ask about today’s trends in developing a compensation and benefits strategy that attracts, retains and motivates top talent.
Q: What are the key components of an effective compensation and benefits strategy?
KM: An effective compensation and benefits strategy addresses both your employees’ intrinsic and extrinsic needs. This means that your policies and offerings provide fulfillment and act as a motivator for your employees. If an employee feels supported through adequate paid time off, affordable health and wellness plans, and backed by a leadership team that offers support and advancement opportunities, they will be motivated to excel in their profession and more likely to stay in the job. The extrinsic needs addressed by an effective compensation and benefits strategy relate to the tangible awards, including competitive, market-based compensation, bonuses, and benefits that together comprise your total rewards offerings.
Q: We are hearing so much about the Employee Value Proposition these days. How do you define the EVP?
KM: The Employee Value Proposition is the packaging of all the elements an employee is offered in exchange for their commitment to the organization. It includes compensation and benefits, perks and financial incentives, but also intangibles, like company culture and its mission and values. It includes work-life balance and flexibility arrangements, opportunities to learn new skills and advance in their career, and an overall sense of feeling valued and having an impact in the work they do.
Q: How can companies balance offering competitive salaries with keeping compensation affordable and equitable?
KM: The first step is to understand the external market. Once you have that data, you can determine which employees are not being paid competitively. Depending on budget, you can prioritize market adjustments for those individuals who are being paid well below market. The data also helps you understand who is reaching the top of the market and develop a plan to manage those employees. It’s important to have some transparency in your pay decisions. If your employees understand how you determine compensation and they know your goals are to offer equitable, competitive and performance-based wages, they will have more trust in the process.
Q: How important is transparency and communications when it comes to an organization’s Total Rewards Strategy?
KM: Communication is key! Effectively communicating how you determine compensation — whether through salary bands or annual market reviews — allows employees to understand how they’re being paid and how the decisions are made. They will have more information, feel they’re being treated fairly, and this opens the door for one-on-one conversations based on fact and not emotion. As we say at KMA, your employees are your most important asset! How do you grow these assets to be even more valuable? Through an effective Total Rewards Strategy that is clearly communicated and regularly reviewed.
Thanks for your insights, Kari!
The challenges facing employers are real but you don’t have to go it alone. KMA has a strong team of consultants who can provide HR and recruiting expertise. We always welcome conversations about how we can help organizations attract, nurture and retain the best talent – just reach out to us at firstname.lastname@example.org