The job market is on the rebound, meaning it’s time for companies to evaluate their incentive compensation policies if they want to hold on to their top talent. Given the chance, your best employees may decide to seek other opportunities, especially if they’re feeling underappreciated. While not all instances of employees taking their talents to South Beach Lebron James-style will cripple the company, a lot of organizations don’t make retaining top performers a priority. Training new people is time-consuming, and there’s the concern that fresh blood won’t completely fill the shoes of those who have moved on.
When jobs are scarce, companies don’t have to do as much. But as more industries experience job growth, more people will be on the move. It’s time to show your top performers that you want to keep them around. Sure, money talks – but it doesn’t say everything. If your company really wants to develop successful incentive compensation strategies, it’s time to get creative.
It’s not always about the money
Many businesses simply assume that an adequate salary will keep employees around. However, many studies have shown that salary itself isn’t as effective a motivating force as you might think. There are all types of incentives that can speak to the personal interests and goals of employees. They can also be tied to performance, giving companies more dynamic ways to reward great employees than just cash.
Forbes contributor Dan Ehrenkrantz proposed that an organization can treat its employees like volunteers in some respects. Instead of a straight salary, they receive compensation in the form of perks. Autonomy, purpose and mastery can be objectives on the same level as salary. Successful volunteer organizations habitually reward top performers with more independence and opportunities to lead. Giving an employee more job flexibility or a guiding role on a new project can be part of a more meaningful incentive compensation policy.
Get rid of ceilings
Many top employees who leave their company do so because they feel like they’ve hit their ceiling. Whether it’s feeling like they can’t advance because there are people ahead of them or have maxed out the salary possibilities for their particular position, a lack of upward mobility can discourage them from staying. One way to eliminate this mentality is to encourage employees to take risks, wrote Inc.com contributor Peter Economy. This allows employees who have proven their mettle to explore more innovative ways of doing things. This gives them an opportunity to keep developing with the company. Professional development as a form of incentive compensation can be a valuable path to a long-standing employer/employee relationship.
