and Using an Employee Benefits Policy
Many small business
owners claim their greatest challenges are attracting, retaining and motivating
their employees. With a strong economy and a tight labor market, it is
essential to keep turnover low and productivity high. And while few, if
any, employees will work without being paid a fair wage, the total benefit
package is often the key element in an employee's decision to work for
your company. Salary levels are only one part of the package.
Why do employees
choose to work for your business?
Financial rewards are an important part of the total benefits an employee
receives. Yet, an employee's decision to work for your company is probably
based on additional factors, many of which you can control. In addition,
there are some things that can increase the satisfaction an employee enjoys
that do not cost additional money. The key is to make sure the total compensation
an employee receives is adequate, is known and is appreciated.
Benefits that cost
Along with wages, company contributions to a retirement plan and company
paid insurance are usually the most expensive parts of "total compensation."
If your company has a qualified retirement plan, make sure the type you
offer is "economically" effective. By that, make sure your employees
are fully aware of it and recognize that your contributions to it are
part of what they get for working. You may also want to review other types
of plans, such as SEPs, SIMPLE IRAs and 401(k) options.
If you offer company
paid insurance plans, again make sure employees recognize that you are
paying for some or all of it. If insurance costs rise, you may want to
consider having employees pay some portion of the cost. This can be effective
if there are choices of health insurance plan options (deductibles and
CO-pays) that have varying costs.
Benefits that cost
little or no money
The work environment and the personal satisfaction an employee gets are
also important parts of the total compensation an employee receives. No
one likes to spend time in an environment that is emotionally uncomfortable.
There are also the federal and state laws that protect workers from harassment
and discrimination in the workplace.
Here are some ideas
that can help boost employee satisfaction:
- Make sure the
work is meaningful. Even if it is boring and repetitive, make sure the
employees know that their efforts are needed and appreciated. No one
likes to think they just spent eight hours doing something useless that
no one cares about.
- Provide ways for
employees to learn. This doesn't have to be paying for a class. Perhaps
there are tasks that can be switched with other employees. Such a switch
will give two people the opportunity to learn something and you will
have some backup if one of the two is sick or quits.
- Empower employees
to make decisions. Most individuals will make the right decisions if
they have an understanding of the issues and have some guidelines. Also,
by letting employees make decisions, managers' time is available for
- Let employees
know what is expected of them and how they are doing. Performance reviews
are essential. Every employee should receive a formal review at least
- Make it a point
to recognize employees when they have done an especially good job. Bonuses
are nice, but compliments are meaningful. Have you ever noticed plaques
for Employees of the Month in many businesses? Some businesses even
provide special parking spots for "Employees of the Month."
- Provide some flexibility.
Everyone is busy and unexpected things do arise. If you can go a little
extra ways to allow employees to tend to important personal matters,
it may come back to you many times over when you need something extra