5 Key Benefits of Employee Compensation Statements
Employee Compensation Statements are growing in popularity with employees in large and small businesses. The statements give employers the ability to outline, in one clear document, each employee’s complete financial and non-wage compensation. Here are five key benefits of an Employee Compensation Statement.
Employees who are content in their jobs – come to work ready to go, know their job and feel that they contribute to their company’s success – are employees engaged with their company. Engaged employees are likely to give more at work and show more loyalty toward their employers.
Personalized Employee Compensation Statements furthers employee engagement by boosting employees’ morale. Compensation statements can serve as a reminder to employees that they are more than just a paycheck. Seeing a total list of benefits that includes work-life-balance through flex time or day care, for example, can help to make going to work each day more fulfilling.
When employee engagement and morale is low, retention becomes the number one problem for an employer. Companies that have high engagement report less absenteeism and importantly less employee turnover. A 2015 survey notes that 56% of employees believe that perks matter and are key factor in deciding to stay put in their job.
Employee Compensation Statements are a visual guide to those perks, giving employees a clear picture of how invested their company is in their success. All employee benefits, including performance rewards, mean that employees have something other than just their salary as a measure of their worth to their company. For those employees who have their compensation statement, they are less likely to ask for salary increases or importantly to look outside of their company to get a bigger salary.
Just as the statements assist employers and employees with retention, it can be invaluable tool in recruiting top performers. Fully 25.2% of employees looking for work state that benefits are very important factors in considering a company’s job offer. Compensation statements tell potential employees exactly what they can expect from the first day and well into the future.
In an easy-to-read statement, employers use compensation statements to give a potential employee a roadmap to the future. From performance reviews to bonus structures, compensation statements tell employees what they earn and can earn in real time.
Compensation statements can be a useful tool for outlining performance expectations for employees. Improving employee performance is easier with a compensation statement because employees work harder and smarter when visual performance markers are spelled out. The statements can be accessible all year around, giving employees quick access and a constant reminder of what they mean to the company.
And, importantly, Employee Compensation Statements are an excellent avenue of communication between employer and employee, which also enhances employee performance. Compensation statements are living documents so they can be revisited at performance reviews to show continuous investment in employee well-being.
Many gracious employers wonder, “Don’t employees understand all that I’m doing for them?” The truth is that without a simple, summarizing annual total compensation statement, many benefits go unnoticed or forgotten about. Take for instance, education benefits, or your 401(k) match. Oftentimes it’s provided and not used, many times because the employee just wasn’t thinking about this benefit and how it improves their life. If they knew, many more would take advantage of it – benefiting both the employer and the employee.