7 Employee Benefits and Compensation Ideas - The Full Guide
Employee incentive plays an imperative role in creating a functioning business. Despite its importance, it is often overlooked and put to the side. Here are the best employee benefits and compensation ideas to keep your workers motivated.
What Are Employee Benefits and Compensation?
Employee benefits and compensation are how a business repays its employees for their hard work. They also serve as energizing motivators for workers to be as productive as they possibly can.
Whether it’s financial bonuses or a small perk, the goal is to emphasize that you see an employee as a valuable asset.
Regardless of how a company chooses to reward its employees, having benefits is the best way to boost morale.
Also read: Employee Motivation Strategies
Why Should You Have Employee Benefits and Compensation?
Many people go to their job without feeling recognized. They may be unhappy, miserable even, yet remain working out of necessity.
That leads to an individual often feeling unmotivated and unseen. They'll cut corners wherever possible, constantly lose focus, and leave on the dot.
Sure, an employer could save a few bucks by not offering any form of compensation, but that could end up hurting a company more than helping it.
Having a multitude of benefits is also a great way to attract talent. A company seeking to hire the most qualified, hard-working individuals should be as equally invested in its employees as they are in it.
Workers are humans. They need a reason to work harder and tools to help them work better. Businesses can indirectly improve their overall performance by improving the lives of their employees.
Also read: How to Create an Employee Compensation Plan that is Effective
7 Employee Benefits and Compensation Ideas
To improve a company's performance, employees must feel valued. Here are seven employee benefits and compensation ideas to increase employee satisfaction.
One of the best ways to retain employees is to offer insurance coverages and health benefits.
Since health insurance can be expensive to maintain on a salary, people often look to work for companies that offer insurance plans.
An employee benefits package usually involves life insurance, medical insurance, and dental insurance but can extend to phone insurance and even more obscure options like pet insurance.
Insurance plans offer tremendous relief to employees and can help your company be highly competitive. After all, these essential costs can be a significant expense for many. Consider these valuable benefits to keep your employees happy and working.
Also read: 10 Employee Incentive Programs That Will Massively Engage Your Team
Bonuses and Raises Based on Performance
Having bonuses and raises based on performance are well-established methods to keep the best employees working harder and drive others into action.
This is one of the benefits many minimum-wage paying chains offer to their workers due to its versatility and effectiveness.
That's not to say businesses that offer higher wages should overlook this compensation idea. Sure, many companies will give Christmas bonuses and annual raises, but these may not elicit employees to work harder.
In short, people love a little extra spending money in addition to their paycheck, and they value it even more when they know they've earned it.
Also read: Ways In Which You Can Show Employees You Are Thankful
On-Site Recreation and Wellness Facilities
Does your base of operations have an empty room that's just collecting dust? Or maybe some unused space that's just left overlooked?
If so, then you might want to consider implementing some recreation or wellness facilities.
This could be as elaborate as an on-site gym or as simple as a break lounge. Since there are limitless possibilities, you can be as creative as you desire.
You may initially see a wellness facility as counterintuitive since it might serve only to distract employees and divert attention from the day’s work. Yet, that doesn’t have to be the case.
People are usually the most productive in their first few hours of work, and they often slow down as the day progresses. By offering recreational areas at the workplace, you can create an environment that’s perfect for refreshing that productive mindset and eliminating the mental fatigue of your employees.
A good way to introduce these facilities without causing your employees to lose momentum is to limit access during busy times (without completely closing them) and to create quotas your employees must make each week.
While setting these facilities up can be a short-term expense, they are a worthwhile investment that benefits all employees of a company.
Also read: What Are 8 Ways To Increase Employee Loyalty?
Unless the business is within walking distance, most people have to pay a hefty sum to get to work each day.
Whether this takes the form of gas, transit fees, plane tickets, or services such as Lyft and Uber, these expenses add up over time.
Reimbursing or paying for an employee's travel cost can go a long way in showing a business's appreciation and dedication to its workers. In particular, it demonstrates that a company cares enough to ensure that they make it to work each day.
Many companies don't have any form of travel reimbursement since they believe it doesn't directly affect the company, but that's not true.
Travel reimbursements make it so that employees have a means of getting to work on time and save on costs that might otherwise eat into their salary.
401k matching is another popular method of employee compensation.
When a company offers a 401k match, it means that they will match an individual's yearly contributions to a 401k and contribute the same amount.
Retirement benefits are important to people because they don't want to be working their entire lives. A company can really show dedication to its employees by offering to match their annual 401k contributions.
Remember, showing appreciation and empathy for a business's employees is the best way to optimize performance and create a productive work environment.
Free Meals and Snacks
One of the easiest ways to keep employees happy and feeling supported is to offer free meals and snacks.
It doesn't have to be every day, nor does it need to be the finest cuisine around (though it definitely can be). Free meals can be as simple as serving free pizza at the workplace on certain days.
Free meals can also manifest as recurring dinner outings or casual lunch meetings. One could even go as far as to introduce a snack bar with complimentary snacks and drinks that can be visited throughout the day.
Maybe a business that already has a cafeteria can offer limited meal vouchers or discounts.
No matter what best suits your business, you'll find that good food is an amazing motivator and an effective way to have your employees' backs.
Recreational company trips are a bold strategy in boosting a positive environment in the workplace and promoting team bonding.
A lot of people don't have the time to travel, particularly families who have commitments like school or other jobs. For some, it's just too expensive and an unnecessary luxury.
You can help navigate these challenges by offering annual employee trips that include family members.
By having a big, yearly trip, a company can create something for its employees to look forward to every so often. So, no matter what difficulties they might face, an employee will be able to anticipate the forthcoming big occasion. Plus, it's a way to give people free vacation days and some respite from the stressors of life.
Another reason to consider this avenue is that group trips inspire camaraderie among workers. Most people get along and work better with friends than they do with mere strangers who share a workplace.
Annual trips will require plenty of planning to be a success, but the long-lasting incentives they create can prove quite effective in a company's wellbeing.
Here are some commonly asked questions regarding employee benefits and compensation:
What benefits do employees value most?
While this depends on the person, people typically value the following employee benefits packages most of all:
An alternating schedule of remote work and commuting
Free gym and paid-media memberships
Student-loan repayment plans
An active work lie
What is a good employee compensation package?
In order to have a good employee compensation package that appeals to prospective employees and keeps existing employees satisfied, you'll have to create a package that is diverse, fulfilling, and inclusive.
To do this, you'll first want to include some of the most popular forms of compensation, such as insurance and 401k matching. These are the first incentives employees look for in a package.
Then, you'll want to add something light and fun that appeals to everyone, such as free food.
You can also include something that helps pay for something necessary, like travel reimbursement.
Finally, you'll want to add a few things that are a bit more niche, but the people who it does appeal to will greatly appreciate it. This could be paid time leave for pets or free fitness classes.
What's the difference between compensation and salary?
Think of salary as a set amount of money based on hours worked while compensation is more of a bonus on top of this.
When you compensate employees, you're going beyond the quota. It can take a bit more effort to compensate your employees, but the rewards you can reap from it may turn out to be much more beneficial for both of you.
What's the difference between compensation and benefits?
Compensation usually refers to the monetary value given back to employees based on circumstances and values. It is given to employees based on their time and effort put into their work.
Benefits are more like perks that aren't directly tied to an employee's work but keep them happy. Having a fitness center or free meals would also constitute benefits.
The Bottom Line
You can't run a company without workers. They're the fundamental building blocks of every company’s success story and are more than just tools.
Ultimately, people are not cars. They can't be paid in gas and keep on running without fail. Instead, humans are more complex and have many needs to be met to stay productive and hard-working.
Understanding this is essential in making your company the most profitable it can possibly be.
Compensation and benefits may not seem productive because they don't offer any direct monetary gain, but it can be assured that they contribute something much more valuable: job satisfaction.
Employees value compensation plans very highly, as they are receiving something in return for their loyalty and hard work. As well as compensation plans it's also important you don't neglect the day-to-day operations of your business. Such as payroll for example.
Using our paystub generator software you are making sure that you are not neglecting such an important business process, while trying to improve other sides of the business.