CompLogix Insights

Does Better Compensation Lead To Better Engagement?

Jul 14, 2016

compensation management

Proper compensation management is an important part of any business, and we’ve talked before about how good compensation management can help retain key employees.  But how does compensation factor in to employee engagement?  While compensation isn’t the only factor in keeping your employees engaged, it is a very important one.

First, better pay can equal better workers.  This obviously isn’t true for every single employee, as some will perform at a level which won’t warrant a certain amount of pay, so it wouldn’t be smart to pay them as much as, say, a high performer.  But for your employees who work hard, are productive, and do an overall good job, good pay is an incredible motivator when it comes to engagement.  If an employee feels that they are being fairly (or even generously) compensated, they’re more willing to do their job.  And if there’s the prospect of bonuses or other performance based rewards, they may be more willing to do it well.

Then you can go beyond monetary compensation, and start looking at the total rewards package and full list of benefits.  Health insurance offerings can ease employee stress, allowing them to worry less about any potential disaster that may loom in their futures and focus on their work.  Things such as sick leave and maternal/paternal leave may also help ease employees’ worries and allow them to focus on the present instead of suffering anxiety about the perils of the unknown.  Not to mention that sick leave and similar perks allow ill or injured employees the proper amount of time to recover before they come back to work,  ensuring that they’re able to perform at the peak of their capabilities.

Vacation pay is another example of a benefit which can relieve stress and thus keep employees more engaged on their work.  Allowing employees to recharge will help keep them from exhaustion and may also make them grateful to the organization for allowing them the chance to relax for a little bit.

One of the most important tools is stock options and similar benefits.  If you link the company’s financial future to the employee’s financial future, there is nothing more motivating than that.  The harder they work, and the better the company does, the better their lives end up being – and nothing helps drive engagement quite like that.

So you see, compensation management isn’t simply a necessary evil of business.  It can actually be a strategic way to keep your employees engaged and performing at their utmost potential.  By performing the right research and making the right tweaks, adjusting your organization’s compensation strategy just might help you drive up employee engagement.

See for Yourself

Ready to learn how CompLogix software suite can help you to work smarter?