Compensation & Transparency

Author : Anne-Sophie Poullard, AF Utami

The Pay model, is a general model for human ressources to define the rewards that a job can give to the employees. There are two types of reward : Extrinsic Reward : what the company give to the employees (salaries, bonuses etc…), intrinsic Reward : what the employee wins by individual (relation with peers, satisfaction etc…). O the other hands, the compensation is part of extrinsic reward, is it all forms of financial returns, monetary feedbacks from the company to employees. There are two types of compensation : Cash compensation : base pay, merit/ cost of living, short-term and long term incentives Non-cash compensation/ Benefits : Income protection, work/life balance, allowances
According to the most recent annual compensation best practices, top performing companies give better salaries and bonuses to their employees in order to improve their annual revenues. The article give the example of Payscale company which have received better revenues in 2015 that expected, thanks to their compensation habits. The average companies try to follow this trend. In 2015, 90% of top performing companies gave pay rises, for 84% of average companies.
The pay rises of top performing companies take part of the sucess story but are not enough.The companies had to build a win-win relationship with its employees who are waited for emotional imports too, like satisfaction in their job. We can summarize that better salaries and bonuses are necessary but not sufficient.
To conclude, the company performance is connected to employees compensation espacially for top performing companies that can afford better salaries. But the compensation is not sufficent to insure the performance because employees are waiting for intrinsic rewards.

References :

https://www.forbes.com/forbes/welcome/?toURL=https://www.forbes.com/sites/karstenstrauss/2016/04/05/is-company-performance-connected-to-employee-compensation-and-transparency/&refURL=https://www.google.co.id/&referrer=https://www.google.co.id/