For some, a job is just a job, for engaged, productive employees, a job is so much more. Engaged employees are looking for a job that has the whole package- a well-paying, flexible job that includes benefits and work-life balance. It isn’t enough to simply have an open position at your company; you must also offer total rewards. What are total rewards? They are the tools available to employers that can attract, motivate, and retain employees. Total rewards are grouped into 5 sections:
- Work-Life balance
- Performance and Recognition
- Development and Career Opportunities
These five concepts work in unison, acting as a tailored package to effectively entice employees. For total rewards to be optimal for your dealership, the package should be adapted to your specific dealership needs; each dealership must cater to their unique culture and employee set. If you implement the total rewards effectively, the program often results in satisfied, engaged, and productive employees, which in turn increases performance, results, and thereby profit.
Review the following sections of total rewards before putting together your own program:
Compensation is comprised of four main parts: fixed pay, variable pay, short-term incentive pay, and long-term incentive pay. By utilizing all four parts of compensation, you positively reinforce employee efforts, incentivizing them to continue to work hard by providing them with additional pay. The four parts of compensation are defined as:
- Fixed pay: the base pay of compensation, fixed pay does not vary with performance or results and is determined by your dealership’s pay structure.
- Variable pay: a one-time payment, variable pay is often a bonus, and must be re-established and re-earned every time it has been won.
- Short-term incentive pay: this variable pay is highly focused and based solely on performance over a period of one year or less.
- Long-term incentive pay: this variable pay extends over a period longer than a year, and includes forms of pay such as stock options, performance shares, performance units, and cash.
By balancing all four of these compensation types, you are offering an enticing package that employees can continuously affect and work towards, inspiring them towards greater performance.
To learn about the remaining parts of total rewards, check back next week.