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Rewards and employee retention

In your mind what is a better reward for an employee:

A) Salary

B) Health BenifitsSolution:

A) Salary:

The objective of rewarding employees is to reward them fairly, equitably, and consistently in relation to the value of these employees to the organization. It exists in order to motivate employees to work towards achieving strategic goals set by the organization.

The reward system is not only concerned with pay and benefits to employees but also additionally with non-financial rewards such as recognition, training, development and greater than before job responsibilities.

Many companies have a clear laid out policy for analyzing and controlling employee remuneration and all other benefits aiming to create and efficiently operate a reward structure for the company. It should have a pay policy and practices, salary and payroll administration, total reward, minimum wage, executive pay and reward.

The reward system has many purposes like building a better employment deal, hold on good employees and reduce turnover. The prime goal is to enhance people willingness to work in the company and increase productivity.

The employees' level of satisfaction does not depend on their absolute salaries instead how much they are paid in relation to their peers and hence the salary increases are considered relative to what the employees have become used to.

People engrossed in their work are motivated by the job they are doing rather than the salary. As such the pay/salary must relate to the accomplishment of goals, the mission and vision of the company. A system that allows an employee the average increase for their industry or length of service proves to be counter productive to goal accomplishment.

The company must carefully define the work culture that it wants to create and plan to their best salary increases for those contributing the success of the envisioned culture. The company must define the change, and pay in keeping with the support and contribution to the change.
To sum up, the salary strategy must be in line to the human resources goals and strategies. If HR function has been assigned with the responsibility to develop highly skilled, outstanding workforce the company must be prepared to pay above the industry level or regional averages to attract good competent employees.

Paying less than the comparable organizations will attract only mediocre employees and fail to achieve the set goal of creating outstanding work force.

B) Health Benefits :

The reason for rewarding the benefits is to promote a productive level of health and well being through coverage for retirement income planning, health, dental, life insurance and income protection for disability. An additional generous leave day is allowed to accommodate personal and family needs.

Cost of medical treatment and price of medicines have gone up very high and people find them exorbitantly high during the working life as well as after retirement. There is no government sponsored national health insurance in the United States as such any benefit provided by the employer goes a long way in the form of financial help for medication, hospitalization and treatment.

There are companies who offer benefits going beyond the base salary figure to ensure higher productivity, lower turnover, earning the corporate loyalty and boosting the employee satisfaction, take advantage of deductions and credits in the tax code. Besides, wellness programs can also reduce the health insurance costs. Many an employers provided cash benefits below a certain income level are tax deductible to the employer and non-taxable to employees. Some benefits like accident, health plans and group life insurance coverage up to US$50,000.00 may be excluded from the employee's gross income, hence not subject to federal income tax.

C) Retirement Benefits:

Retirement benefit is a contract for a fixed sum to be paid regularly to a person known as pension after the retirement. If it is constituted by the employer, for the benefit of an employee, and is called occupational or employer pension.

The plan is determined by a formula incorporating the employee's pay, years of service, age at retirement and other similar factors. The plans are as defined benefit or defined contribution. The defined benefit guarantees a certain amount payable at the time or retirement as per a fixed formula depending on the member's salary, and the number of years' membership in the plan.

A defined contribution plan provides a payout at retirement dependent on the amount of money contributed and the performance of the investment vehicles utilized.

The employer's retirement savings plan is an essential part of an employee's future financial security. It is in the best interest of the employee to understand clearly how the plan works and the benefits he will receive, as in the case of keeping a track of money saved in a bank or other financial institution.

401 (k) and 403 (b) pension benefit plan and long term care insurance plans, legal assistance plans prove very useful after the retirement.

Best reward:

Salary is certainly the best and most important reward for any person earning in exchange of his labor, time, efforts and career. It influences one's life style, standard of life, place in the society and above all the other benefits that you enjoy in life. Your contribution to the retirement fund, savings for health care, health care benefit everything depends on the salary that you earn.
If you do not have any other course for earning your livelihood then employment with any organization is the only way out and the salary depends on your self - investment, how much and how far you have strived in life for your betterment in every respect.

C) Retirement Benefits

Explain in detail your selection. Three to four paragraphs would be sufficient.

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Solution:

A) Salary:

The objective of rewarding employees is to reward them fairly, equitably, and consistently in relation to the value of these employees to the organization. It exists in order to motivate employees to work towards achieving strategic goals set by the organization.

The reward system is not only concerned with pay and benefits to employees but also additionally with non-financial rewards such as recognition, training, development and greater than before job responsibilities.

Many companies have a clear laid out policy for analyzing and controlling employee remuneration and all other benefits aiming to create and efficiently operate a reward structure for the company. It should have a pay policy and practices, salary and payroll administration, total reward, minimum wage, executive pay and reward.

The reward system has many purposes like building a better employment deal, hold on good employees and reduce turnover. The prime goal is to enhance people willingness to work in the company and increase productivity.

The employees' level of satisfaction does not depend on their absolute salaries instead how much they are paid in relation to their peers and hence the salary increases are considered relative to what the employees have become used to.

People engrossed in their work are motivated by the job they are doing rather than the salary. As such the pay/salary must ...

Solution Summary

To engage a good employee a company has to bear in mind that poor reward system attracts mediocre employees who will be for ever in the lookout for a better opening elsewhere suiting their talent, interest and that offer better job satisfaction. The expenditure incurred on their recruitment and training goes waste.

The company must structure a good reward system by way of offering attractive salary, whim and ego satisfying recognition not always pecuniary, opportunities for growth, good medical benefits and avenue for saving for retirement days that preferably by inflation linked.

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