Compensation as a Retention Strategy

This paper provides an understanding of strategies of staff retention in companies. It stresses on the measuring and rewarding performance through compensation and other benefits, stating that the recognition for individual performance would lead to higher motivation at work and help in employee retention.The review of the retention strategies shows the eleven key learnings based on which retaining the employees in the company and maintaining the competition in the current market scenario could be made easy.The paper stresses that compensation and benefits is to be made instrumental to obtain the goals of the company, focusing on the direct monetary compensation system.It states that designing the compensation is the most important part of the whole process and is directly related to the business strategy of the company. It is inclusive of:

• Focusing on the strategic objectives;
• Ensuring commitment through participation and communication;
• Analyzing job functions;
• Writing job descriptions;
• Determining internal pay equity;
• Ascertaining external pay equity;
• Designing the salary structure.

The paper provides the key to the successful implementation of the compensation system including:

• Involvement of the management and leadership in the whole process;
• Regular communication with employees;
• Designing of a fair system and training employees to use it;
• Generation of trust among the employees about fairness of the system.

The paper concludes with a checklist for the compensation system. It encourages taking small steps towards implementation of such systems.