Strategically managing Compensation and Benefits in an organization

Compensation and benefits are key factors in hiring, motivating, engaging and retaining the best talent for any level job in every industry. Employers know that it is tough to find and keep good talent. Today employees have the luxury to compare their compensation with global organizations. That makes the job of an SME organization even more challenging. HR professionals in SMEs are challenged to benchmark salaries with large organizations and device effective compensation & benefits practices. As a result, more companies are offering very competitive benefits packages. It might be difficult for a smaller company to compete with bigger companies because a smaller company might not have the financial means to do so. Even without the deep pockets that big companies have, small business owners can strategically plan to compete with compensation and benefits programs.

Strategic compensation planning considers effectively positioning the organization by considering all aspects of total reward including tangible and non-tangible benefits like career progression. Some companies are even looking for innovative options like cafeteria benefit schemes for employees which gives them more flexibility to choose from available benefit options depending on their personal needs. Specialized HR consultancies play a vital role in helping companies designing their benefit plans.

Flexible Benefits Play a Major Role in Engaging Rewarding Employees

·        An increased focus on encouraging employees to control or manage their own housing / medical costs

·        An increased focus on giving employees the flexibility to select benefits and manage their taxes

·        An increased focus on enhancing employee mobility and managing company costs

An important aspect to C&B is linking pay with performance. Compensation should be performance based and should be designed to attract as well as to retain the already existing employees in the organization. Benefits should also be designed to improve job satisfaction as well as to motivate the employees within the organization to improve their performance. The pay for performance philosophy of an organization should also be integrated with the HR policies & procedures. This will help organizations in effectively managing compensation and benefits as well as avoid any discrimination or litigation arising out of C&B programs.