Compensation & Benefits
The two motivating factors in job decisions are compensation and benefits. Compensation has two components Extrinsic and Intrinsic Rewards. Extrinsic rewards include monetary rewards such as base pay, incentives, and benefits. It also includes Non-monetary rewards that consist of recognition, employment security, and challenging work. Benefits are a form of compensation that proves security for employees and their families (Swift, 2022). Those benefits consist of things such as life insurance, disability insurance, retirement, and paid time off.
Why do compensation and/or benefits motivate individuals?
The role of benefits is to attract, retain and motivate employees (Swift, 2022). In order to be attracted to a job, there must be an incentive for people. In other words, individuals want to know “what’s in it for them.” Which I believe is valid. An individual should know how a job is going to impact them, whether it’s a positive or negative impact. When trying to retain and motivate employees it is important to think of the factors that might influence turnover. Some factors that influence turnover are work environment, morale of employees, and pay offered. By providing a positive work atmosphere, showing appreciation to employees and having competitive pay can help boost morale and reduce the turnover results.
What effect compensation and/or benefits have on individuals?
From personal experiences, I can attest that benefits and compensation have a great impact on whether or not an individual accepts or declines a job, leaves or stays at a job, and how much effort is put into the job. A couple of years ago I got offered a job at local business. This business had a great environment and the pay was great. However, there were no benefits included in the job. I had taken the job under the assumption that I would be able to work my way up to a position that included benefits. I soon found out that was not the case. I ended up putting my two weeks notice after working there for six months. It was hard because I enjoyed the people that I worked with and the environment but finically I needed a job that would provide me with benefits or give me the opportunity to work to get them.
End Thoughts
Compensation and benefits greatly incentives behaviors. In other words, they can “make or break the job.” It is important to remember this when in an HR position. People often are more willing to have lower pay and hirer benefits than they are willing to have lighter pay with no benefits. It is also important to know the audience. for instance, if you hire a majority of individuals who have families or are married they are going to prioritize benefits very high. On the other hand if you hire mainly high school/ college aged individuals higher pay will be more important.
Resources
Swift, Michele. Lecture 1-3 Compensation & 6-9 Benefits. (2022, July 26). https://canvas.oregonstate.edu/courses/1878136/pages/week-7-learning-materials?module_item_id=22230142
