Worker's Compensation Metrics: Assessing and Reporting on the Success of Your ProgramHR Resource
February 3, 2014 — 2,820 views
The good old way of keeping your employees motivated is through performance based compensation. Nearly one-third of companies use this technique, to keep their stellar performers motivated. Surveys have shown that companies need to track the effects of these compensation programs better, to see the influence it is having on the employees. Employee productivity and engagement levels clearly shed light on their satisfaction and motivation levels. Higher levels of employee satisfaction means a positive boost to your company's progress.
Employees who show frequent absenteeism or low productivity can negatively impact your turnover rate. It becomes crucial to keep your high-performing employees going for your company's progress. Align performance ratings with compensation decisions to get a clearer picture of the effectiveness. By knowing how effective your employee compensation program is, you can revise it to improve your employee performance, thereby boosting your revenue.
How to Come Up With a Successful Compensation Program
An organizational culture that stresses on the necessity of a good workers' compensation program is a winner. A good compensation program can attract potential employees and job seekers, while retaining your star- performers. At the same time, it is important to weed out the risks that stem from these programs. The risk management team must implement processes to make sure these programs are in line with the strategic objectives of the company, while keeping them within the boundaries of its risk appetite. Your strategy should check these points:
- Maintaining appropriate incentive levels to keep your good talent, and attract new ones.
- Mitigate the risk levels, through appropriate internal controls.
- Aligning your incentives program within your risk profile boundaries.
- Meeting demands from stakeholders and regulators on analysis, reporting, and disclosure.
Addressing these targets can be done through both long-term and short-term approaches. Start by viewing your compensation program as a cycle and not a plan. Initially, you'll have to come up with long-term and short-term strategies that supplement your current program. The approach should be such that you strike the right balance between reward and risk, without it tipping either way. Whether or not it's welcome, be open about changes you make in the compensation program with your employees. Assess the performance levels with those intended through the plan, through quantitative and qualitative analysis. Notify your stakeholders on any deviations in the same.
Most of these programs work on a yearly basis, so understanding and employing an effective strategy might take years. But there are many short-term initiatives you could take. There is no correct number for the payout structure, assess how appropriate your metrics are in accordance with your circumstances. Risk mitigation factors like deferral features and retention can be used as part of the plan. Engage your employees in discussions that reveal the philosophy behind revising plans, rather than just the plan. An active forum that addresses employee concerns and queries regarding the same can be helpful. Long-term initiatives can be arrived at by reviewing a series of iterations through the various compensation program cycles.