Dear Keep Them:
A study sponsored jointly by Sibson Consulting and WorldatWork notes five types of rewards that employees value, and that contribute to employee retention: 1) compensation; 2) benefits; 3) career opportunities; 4) work content, and 5) a feeling of affiliation with the company and its values.
When it comes to compensation, there are several options. The most common and useful approach is a retention bonus that’s offered to top performers but preserves the overall base pay structure. The U.S. military is an interesting case in point. How does it retain personnel with “hot” skills, such as aircraft pilots, mechanics, and IT specialists, who can earn far higher salaries in the private sector? The armed forces uses highly flexible retention bonuses that can actually exceed annual salary. This preserves a flat, highly egalitarian overall salary structure while maintaining some relationship to market value in total compensation delivered.
Other compensation options include increasing the differentiation between top performers and others in the delivery of annual cash incentives and stock options or stock grants as a way to retain the best employees, or through special one-time grants of options or stock.
Other types of rewards used to retain key employees:
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Career opportunities are especially motivating to high performers. It’s important to make sure that key employees know that they’re highly valued, in order to increase their sense of job security and perception of future advancement opportunities. Similarly, special training opportunities or developmental assignments can be provided selectively even when training and development budgets are tight.
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As far as work content goes, you can give special, prominent assignments to key employees or permit them unusual autonomy in their work.
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In the area of benefits, special perks for key employees–such as additional paid vacation days–can be useful. (Though consider whether you really want them out of the office).
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Foster a sense of affiliation with the company and its values. Make sure you have a specific, important, compelling mission. Make sure executives not only say that that the company believes in rewarding top performers, but that they back it up with action.
SOURCE: Gerald E. Ledford, Jr., senior vice president and national practice leader, employee effectiveness, Sibson Consulting, Los Angeles, California, April 4, 2003.
LEARN MORE: Please readFour Ways to Lose Your Best People.
The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.