The Future
of Employee compensation
The world of work as we see it, is evolving to become a space where the
value of each human contribution in professional and service capacities is
valued and entitled to compensation. That is why it is of timely importance, to
pay more attention to the future of compensation and the associated paradigm
shift.
Defining Employee Compensation
The simplest of definitions to employee compensation entails providing
employees with base salary, wages, incentives and/or commission in exchange for
the financially quantifiable services they provide. However, this traditional
definition is changing with the introduction of rights and entitlements of the
employees and with the advent of service automation and AI-based technologies. On
the one hand, the globally recognized standards and conventions have succeeded
in asserting the rights and entitlements of employees at workplace to prevent
labor exploitation and thus ensure that the services provided by the employees
are aptly compensated with the fringe benefits, conducive work environments and
incentives. On the other, the technological advancements have provided ample
opportunities for employers to recognize their employees as living, breathing
value additions rather than mere tools to get the work done.
Future-Proof Compensation Strategies
As many employers are transitioning to project-based work structures
instead of typical carder-oriented work structures, the strategies of
compensating the employees must also embrace the resultant changes.
In line with the vast diversification of job markets, the modern-day job
seeker is paying greater attention to growth opportunities in a company rather
than the stock value and long-term job security ensured by employers. Hence the
key to making employee compensation more palatable and attractive for the
prospective employees, lies in the efforts made by the employers to incentivize
the workers and motivate them by offering both monetary and non-monetary
benefits in their compensation schemes. The monetary benefits include
performance-based bonus plans, company-sponsored sabbatical’s while
non-monetary benefits may include, work sharing arrangements, flexible work
hours and other fringe benefits in healthcare etc.
Conclusion
The idea of employee compensation
has started appealing to the employees and employers alike, in a way that’s
drastically different to the traditional approach to compensation. The emerging
trends of employee compensation are more focused on performance-based incentives
and other non-monetary benefits which provide more growth opportunities to
employees. The globally recognized rights frameworks and technological
advancements like AI-based technologies and service automation capabilities
have changed the value attributed to human workforce while elevating their
presence at workplace to a more humane aspect. The future-proof employee
compensation strategies must be directly related to work performance, easily
measurable and employee-focused. With such employee compensation strategies,
the employers regardless of their size and scale, can get the edge in the
emerging job market that caters more to the job seekers rather than job
providers.
References
1). stats.oecd.org.
(n.d.). OECD Glossary of Statistical Terms - Compensation of employees
Definition. [online] Available at:
https://stats.oecd.org/glossary/detail.asp?ID=396 [Accessed 16 Nov. 2021].
2). Němečková, I. (2017). The role of
benefits in employee motivation and retention in the financial sector of the
Czech Republic. Economic Research-Ekonomska Istraživanja, 30(1),
pp.694–704.
3). Osborne, S. and Hammoud, M. (2017).
Effective Employee Engagement in the Workplace. International Journal
of Applied Management and Technology, [online] 16(1), pp.50–67. Available
at:
https://scholarworks.waldenu.edu/cgi/viewcontent.cgi?article=1239&context=ijamt.
government policies will certainly play a role in advancing some of these issues, forward-thinking businesses are already setting the app’s for it .
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ReplyDeleteCompensation that is skillfully handled aligns people's behavior with the company's strategy, resulting in improved performance. When it's poorly managed, the consequences can be disastrous, crucial talent loss, demotivation, misaligned objectives, and poor shareholder returns. Strong compensation strategy is required in order to attract and retain people who have the appropriate knowledge, skills, aptitudes, competencies and attitudes to get the job done.
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ReplyDeleteEmployee compensation is a method of motivating employees and it has explained about the employee compensation and its benefits in an effective manner. Further, it is important to apply compensation strategies in future in order to retain employees with the long run of the organization.
ReplyDeleteEmployees want incentives more than compensation. The growing workforce is much more invested in motivation through other means like bonus ...
ReplyDeleteNice one, Thank s for share
Lot to learn in this article. Well done.
ReplyDeleteEmployee remuneration trends are shifting toward performance-based incentives and other non-monetary rewards that provide employees with more prospects for advancement. Globally recognized rights frameworks, as well as technology breakthroughs like as AI-based technologies and service automation capabilities, have shifted the value given to human labor, elevating their presence at work to a more humane level.
ReplyDeleteCompensation and benefits are a key part of work in HR. When planning ahead for benefits to meet the changing needs of the workforce, a new way of thinking is required to respond to changes in the world of work and create resilience for the future.
ReplyDelete