Improve Job Productivity: Flexible Benefits

EDITOR’S NOTE: This is part one of a three-part feature. Come back to this site tomorrow for more information on how salary compression affects job productivity.

Compensation costs - salaries, wages, and benefits - are a large and increasing part of operating expenses, yet productivity can decline among workers who get more pay and benefits. Workers are productive with fair pay tied to performance. Ironically, not all employee motivation and productivity problems are solved by pay raises and promotions. It isn't necessary to make pay adjustments beyond a fair industry-wide (marketplace) level.

The tailoring of benefits to satisfy specific needs is part of the quality of work life technique. It is a way to maximize the amount of labor costs going to the employee and to maximize your return on these costs without increasing across-the-board expenses. By making a special effort to satisfy individual employee needs, you reinforce the motivational value of the flexible benefit.
For example, you can reduce unwanted employee turnover and related recruiting, hiring and training costs by shifting these costs from developing new employees to keeping experienced employees. You can motivate an employee to increase productivity by providing opportunities for career development (training or schooling).

At the same time you have improved the worker's skills and shown recognition of the worker's value and aspiration. A tailored benefit can be worth as much to an employee as a pay increase. Such a benefit is practical because (1) it probably costs no more than worker unrest and diminished productivity and (2) it is probably less costly than a comparable pay increase.

Age, education, job experience, job fulfillment, marital status and family size are considerations that determine the utility and attractiveness of a benefit. Different benefits appeal to different people. Everyone's needs are different. A younger employee might be motivated by having use of a company car. An older person may want more status like a title or a professional association membership. The list of possible employees benefits and their applications is unlimited. To get the maximum value, you've got to tailor the benefit to the job and your business requirements and financial capability.

• Think how you could use:
• Pre-tax thrift-savings programs
• Recreational programs
• Discounts
• Scholarships
• Personal financial planning
• Loans
• Tuition refund
• Profit sharing
• Company car
• Personal expense account
• Parking privileges
• Legal assistance
• Extra vacation
• Child care
• Job titles
• Professional or trade association memberships
• Travel

A flexible benefit is two-fold. Not only does the benefit satisfy some employees’ specific needs but it also communicates your concern to meet these needs, creating the kind of work environment that contributes to increased employee productivity.

You must recognize the productivity problem and the needs of your employees so that you can tailor the benefit to meet the situation.

This article was reprinted with the permission of Bizmove.com.