If you pay peanuts, you will get monkeys.
That statement, or some adaptation of it, has been made repeatedly by individuals in and out of the world of work. In simple terms it means that if you want to attract the best people you have to be willing to pay as much money as necessary to attract them.
In Barbados, these words are best remembered for their use by then Minister of Tourism Billie Miller (now Dame Billie) as she publicly justified paying the so called “dream team” of Earlyn Shuffler (president), Errol Griffith (vice president, Finance), and Tom Hill (vice president, sales and marketing) in excess of $100 000 annually when they were appointed to lead the Barbados Tourism Authority in 1995.
On the other hand, we often hear that to whom much is given, much is expected, which is self explanatory. Compensation and benefits is one of the key areas that Caribbean Catalyst Inc. will use as it assesses companies participating in Barbados’ Best Employers (BBE) 2014. The BBE organiser will determine “the extent to which the company’s compensation and benefits programmes are in alignment with employees’ expectations”.
Regardless of the job, the wage or salary an individual is offered or is able to negotiate is one of the main concerns of workers and employers. This goes whether the employee is entering an entry level job or if they are securing a managerial post.
People want to know that they are being paid what they are worth and this goes beyond the regular pay packet to include perks such as pension and medical health schemes, allowances and company cars. Conversely, employers always want to know that they are getting value for money, that the worker they have just hired is worth the compensation.
The most recent instance of such an issue generating discussion and grabbing public attention was when technology company Microsoft announced the appointment of its new chief executive Satya Nadella. It became known that his base salary was $1.2 million, more than 70 per cent higher than the base pay received by his predecessor, Steve Ballmer. The added benefits included participation in an executive incentive programme, and company shares.
Addressing this issue in an article published by the Houston Chronicle, business and personal finance specialist Rose Johnson wrote: “Compensation can include monetary and non-monetary components. Compensation often includes an employee’s base salary and additional benefits, such as health insurance, retirement plans and performance bonuses. The compensation packages a business offers to employees affects the company’s recruitment rate, retention rate and employee satisfaction . . . . A business owner should understand the importance of compensation and the prevailing laws to remain competitive in the market.
As to specific areas of importance, Johnson said these included:
• Recruitment – the compensation packages that businesses offer to employees play an important role in the company’s ability to attract top talent as job candidates. Top-performing employees greatly impact the competitiveness and productivity of a small business. The specific components of an attractive compensation package vary per employee.
A high base salary may attract a top job candidate that is 20-something and single, while a job candidate with a family may consider a flexible work schedule extremely important.
• Motivation – compensation often affects an employee’s motivation and job satisfaction, although it is not the only factor. Many employees feel motivated to help their companies succeed if the employer shares its profits with employees, such as with bonuses or profit-sharing plans. The greatest impact of money on productivity and performance is in jobs where performance is directly related to compensation. For example, the knowledge of receiving a bonus after achieving a certain sales quota will likely motivate a salesperson to increase productivity.
• Retention – retaining productive employees is critical to running a successful business. Retaining employees saves companies money in training costs and helps maintain an efficient and knowledgeable workforce.
Health insurance and retirement packages are benefits that many employees desire from their employers. Companies that offer these benefits have a much better chance of retaining workers than businesses that fail to offer benefit packages.
Other ways to retain employees is through regular promotions, which not only provide an employee with a higher base salary, but also the ability to take on more responsibility in the workplace.
(SC)
