A recent survey conducted by Payscale finds 65% of employees in America prefer bonuses based on personal performance. This is because employees view these bonuses as incredibly lucrative. However, to get these bonuses workers will often have to meet rigorous performance goals.
Some 75% of workers in the survey prefer tiered performance bonuses over “hit-or-miss” bonuses. Provided the total remains same, 53% of workers prefer 12 monthly bonuses while 47% prefer one annual bonus.
The survey comes at the heels of a record-year of job growth in 2018 with businesses adding 2.6 million jobs. US employers hired over 40 percent more people than generally expected last year. The booming economy has spurned more job options for employment prompting an exodus of workers. To mitigate the hemorrhage of talent, businesses are working to beef up their compensation strategies and practices. With demand exceeding the supply of labor has prompted nominal wages to increase by 3.2 percent year over year.
Tactics to Retaining Employees
Employee retention was rated high among organizations (66%) this year up by 7% from 2018. Yet, despite employers’ concern over retaining talent, most organizations are not allocating more to their base pay increase budget.
According to the report, 81% of organizations are planning base pay increases in 2019. However, the average increase isn’t expected to change much from 2018, with 69% of employers estimating an average increase of 3% or less.
Nevertheless, organizations are differentiating pay based on performance in order to retain high performers. And they are using a variety of tactics to do so. The popular retention tactics organizations plan to use in 2019 is the merit-based pay plan (used by 61% of organizations). Followed by learning and development opportunities (59%), and the discretionary bonus plan (34%).
The survey also notes businesses are making greater use of incentives, benefits and perks to hire and retain staff in this tight job market. Employers are going beyond traditional benefits like employer-paid health insurance and retirement plans to keep up with evolving employee needs and desires. They are also embracing work-life balance as a differentiator. They are allowing more of their employees to work remotely (44%) up from last year’s 39%. Addotopmaly, they are also offering flextime 37%, paid family leave 32%, and a four-day workweek 10%.
Many employees today, especially younger ones, are looking to grow and they expect their employers to provide them with constant learning and growth opportunities. In 2019, organizations see training and development as their biggest investment area within HR, according to the 7,030 respondents. Some 23% of respondents chose training over other areas including retention, recruiting and compensation.
Businesses in 2019 are keeping a close eye on the job market. More than half (56%) of those surveyed have completed a full market study within the past year. While 24% of organizations referenced market data for individual jobs annually and 18% did so monthly.
In addition, many organizations have come to the realization they need to use multiple data sources to cover all of their positions. In 2018, 82% of all organizations used two or more sources of market data.
However, business still find developing a solid pay brand elusive. Of these, only 40% of businesses feel confident about their pay brand among their employees. While a slightly larger group (41 %) feel their pay brand is neither good nor bad. A further 19% describe their pay brand among employees as bad or very bad. Others admit that they have yet to develop their pay brand while some grapple on how to improve pay transparency.
In regards to transparency, many companies are aspiring to move up the pay transparency spectrum this year. Almost a third (28%) of those surveyed plan to share pay ranges with individual employees. A further 23% plan to reach a place where their comp plan reflects the organization’s culture and drives talent strategy. Despite these moves, however, most companies are still reluctant to reveal the details to their employees. In 2018, only 36% of employers shared pay ranges with their employees for their position.
Get the latest headlines from Small Business Trends. Follow us on Google News.
It adds an ego boost as well. So it is not just money. There is also something that makes you feel recognized for your work.