Compensating Workers through Pay and Benefits
Today's human resource managers face a wide range of challenges in helping their organizations determine what types of compensation and benefits best suit their employees' needs. Because of the diversity of today's workers in midsized to large organizations, the choices can be mind-boggling, but HR managers must work to get the right mix to attract and retain talented employees. Older employees are more concerned about how their retirement accounts are shaping up; working parents are desperate for child care; younger workers want opportunities to move up the ladder fast. Thus HR managers and other executives must come up with creative ways to motivate and empower employees through compensation and benefits plans.
The following companies have combined some innovative perks with traditional ones:
• The S.C. Johnson Company in Racine, Wisconsin, has a company-owned, employee directed 146-acre park with an outdoor recreation center, child care center, softball fields, tennis courts, golf driving range, miniature golf course, and other attractions. It also offers a paid sabbatical program and an expanded maternity/paternity/adoption policy, with time off for the adoption process.
• CIGNA Insurance Company employs 33,000 people worldwide and also combines a variety of traditional and alternative benefits for its employees, from medical and dental insurance plans to a company chef who will make meals to order for employees to take home to their families at the end of the day. CIGNA also offers flexible work arrangements, health and wellness programs, and a tuition reimbursement program for workers who want to continue their education.
• Employees at Wilton Connor Packaging, Inc., in Charlotte, North Carolina, can actually bring their dirty laundry to work and have it cleaned for $1 per load. The company also offers child care services, on-site tutoring for children, and English classes for employees. In addition, Wilton Connor conducts a six-week summer school program for children of fulltime employees. Workers at Wilton Connor seem to be satisfied; only two leave the company on average every year.
• Financial services firm Salomon Smith Barney provides time off for special needs, such as caring for an ailing relative; child care discounts and referral services; adoption assistance; a Volunteer Incentive Program that encourages employees to volunteer for nonprofit organizations; a Life Works Program that is designed to help workers balance work and personal responsibilities; on-site medical attention and prescription fulfillment; and investment opportunities.
• Accenture (formerly Andersen Consulting) actually employs a concierge to run errands such as grocery shopping or dry-cleaning pickup for employees who have to stay late or can't take time out at lunch for these errands. The company also focuses on professional development of its new hires and offers Student Leadership Conferences to final-year college students in the United States, Europe, and Asia.
• Both Coca-Cola and Home Depot provide wellness and fitness programs designed to reduce stress and enhance employee health. Coca-Cola has found that employees who use these programs are not only healthier but more productive on the job. Home Depot has taken its program a step further by offering on-site classes in smoking cessation, nutrition, proper exercise, and balancing work and home life. The Center for Disease Control in Atlanta strongly recommends these types of classes for the well-being of workers.
On another front, Home Depot has recently launched a new type of class for employees: an in-house course in personal finance. The company states that the financial health of its 250,000 employees is a priority. "We want to be an employer of choice, and we see helping associates [employees] manage their finances as one more way to do that," explains Layne Thome, director of associate services for the company. "We want to win the war for talent. We see this as another tool for improving recruitment and retention." Managers were spurred to develop the course after realizing that many of the company's employees were having financial trouble. "We . . . found that associates were cashing out of their retirement accounts early and they were making early withdrawals on their stock purchase plans, which also concerned us," says Thome. "We saw we had a population in trouble." So the company has done something about it. Partnering with the Fannie Mae Foundation and the Consumer Credit Counseling Service, Home Depot has custom-developed classes for its employees.
Developing the right compensation packages for employees can help ensure low turnover and higher productivity-just what every company wants.
Questions
1. You've seen a range of advantages of the creative benefits programs just described. What might be some disadvantages?
2. What special challenges might companies such as Coca-Cola face in developing and implementing compensation packages for employees in other countries?
3. As an employee, which is more important to you: your pay or other benefits? Why? Do you think this ratio might change as you grow older and progress in your career?
4. Do you think these types of benefits have the greatest influence on attracting new employees, motivating current employees, or keeping current employees? Explain your answer.