Companies have consistently followed talent market trends when it comes to employee wages and compensation. As a result of the constantly shifting business climate and intermittent legal requirements resulting from COVID regulations, many organizations are currently re-evaluating their benefits and pay strategies (Fulmer & Li, 2022). The compensations and benefits plans offered by SEIIC are based on conventional design concepts characteristic of a business with SEIIC’s background. For instance, the annual compensation raises that all employees receive are only a few percent, which frustrates both managers and top cadres. There is not much room for greater raises for top performers due to the budget deficit. High performers who feel they are underpaid consequently frequently look for new employment. Because of the performance appraisal system and company philosophy, which favors seniority over performance, compensation is severely constrained.
Recent approaches and trends in compensation strategy emphasize several factors. First of all, employee concern and sensitivity to meeting their financial obligations have increased due to rising salary insecurity and extensive job losses caused by the pandemic. As a result, businesses are trying to be more open about how employees’ salaries are calculated. Due to this, there is now more of an emphasis on equal pay, fair performance assessments, and connecting individual performance to corporate results (Fulmer & Li, 2022). This is a beneficial approach since it allows room for maneuver when looking for top talents and in keeping the best cadres in the company. The downside of this trend revolves around complicated and sometimes outdated business models, making it hard to offer a certain amount of transparency. Moreover, complicated bureaucratic composition gives its portion to achieving this.
The importance of promoting gender equality in the workplace is also considered a serious trend in compensation strategies. The organization’s long-term incentives and career development compensations are set up to support internal equity because doing so will boost productivity and lower turnover (Nerstad et al., 2018). Beneficial outcomes of this trend are manifested in decreased employee turnover and increased employee confidence in the company. On the other side, there is an growing need for qualified employees, which makes it hard to keep the gender balance in some industries. SEIIC has to be fair and open about how the compensation model is set in respect to the market rate if they want to succeed.
Another important compensation strategy approach lies in the domain of psychological and mental health compensations. Untreated mental illness among workers worldwide was causing decreased productivity even before the pandemic (Fulmer & Li, 2022). Offering employees adaptable mental health help has emerged as the best way to secure compensation. This might take the form of extra team meetings or training sessions for staff members who could use them. This is a beneficial approach since it supports current workers while assisting in the recruitment of fresh talent. As a downside, some companies struggle to allocate already tight-set budgets on the issue.
Employee benefits can assist keep top performers on the team in the absence of consistent, hefty pay raises, making the domain crucial for businesses like SEIIC. A number of strategies for obtaining benefits are currently becoming more popular. First, profit sharing, which can be a motivating strategy that boosts employee engagement and morale and raises the likelihood that the company will keep its workforce. This strategy is advantageous since it raises employee morale and enhances the possibility that employees will stick with the business. Profit sharing is typically given to all employees, regardless of performance, whereas income sharing is performance-related and is only given to top performers (Nerstad et al., 2018). On the other hand, the added expenses associated with profit-sharing programs might be substantial, which can lower investment in business development and organizational structures.
The increased interest in Generation Z is another intriguing development in the field of benefits. Due to its aging staff and the pressing need for a fresh, energizing workforce, SEIIC should pay particular attention to this. Many firms offer junior staff the tools and cash they need to pursue their education (Sorensen et al., 2021). A strong online presence is another approach to draw in this generation, which is why many businesses spend on the social media reputation of their brands. The disadvantage of this approach is the generational distinctiveness, which can lead to conflict between generations and harm corporate culture.
The staff of many organizations continues to experience growing financial anxiety. Decreased motivation and focus may result from this. SEIIC can incorporate financial recovery and training tools into employee benefit packages to help employees refocus on their professions in order to take advantage of employee attention and focus. This can show up in budgeting counseling, retirement savings plans, and emergency savings accounts (Singh, 2019). The drawback is that putting this beneficial method into practice can be difficult due to a tight budget.
Because so much of intrinsic motivation originates from the employee’s own inner desires and objectives, it might be more challenging for employers to promote and develop it. The development of a firm can be influenced by a number of internal motivators that SEIIC can take into account. For instance, improving accountability in progress tracking will help recruit talent and steady HR procedures. Recognizing success is one of the most crucial motivators, and it is essential for all employees in most businesses (Nerstad et al., 2018). To properly execute its pay and benefits scheme, SEIIC must first make necessary adjustments. Lastly, there is a trend toward the growth of social interactions, which is beneficial for workplace culture and employee motivation.
Although extrinsic motivators frequently do not have the same long-lasting impact as intrinsic motivators, employers may find it simpler to support and promote them. For SEIIC, it is crucial to recognize top performers with incentives and bonuses based on performance rather than seniority. However, this can cause conflict between the established leadership and the newcomers. The significance of one’s job can inspire people to respect their work and think it has value, which is another key extrinsic motivation (Sorensen et al., 2021). The drawback is that it is not applicable to any occupation and is primarily appropriate for senior employees.
SEIIC may create and keep high-value performers in an organization by putting the aforementioned approaches to incentives, perks, and motivating trends into practice. An plan that focuses on three main aspects has to be created to accomplish this goal. First of all, it is crucial to get rid of the approach of “seniority over performance”. This will lower staff turnover and increase overall productivity. Secondly, SEIIC must distribute its budget between annual raises and benefits for its employees, which can be more satisfying in many instances if it follows the trends highlighted. Lastly, the company should build a more favorable image in the eyes of the new generation and support its career path, which will be beneficial in the long term.
References
Fulmer, I. S., & Li, J. (2022). Compensation, Benefits, and Total Rewards: A Bird’s-Eye Review. Annual Review of Organizational Psychology and Organizational Behavior, 9(2), 147-169.
Nerstad, C. G., Dysvik, A., Kuvaas, B., & Buch, R. (2018). Negative and positive synergies: On employee development practices, motivational climate, and employee outcomes. Human Resource Management, 57(5), 1285-1302.
Singh, D. (2019). A literature review on employee retention with a focus on recent trends. International Journal of Scientific Research in Science and Technology, 6(1), 425-431.
Sorensen, G., Dennerlein, J. T., Peters, S. E., Sabbath, E. L., Kelly, E. L., & Wagner, G. R. (2021). The future of research on work, safety, health, and wellbeing: A guiding conceptual framework. Social Science & Medicine, 269(3), 113593.