Improve Employee Retention: Through Employee Benefits

As the Human Resource Manager for both retail stores and Internet Stores, it is important to ensure that our company continues to grow and become profitable. Recently, it has come to my attention that the base compensation and benefit packages we offer to our employees are no longer sufficient for employee retention. It is therefore necessary to develop new benefits programs to attract talent and retain our efficient workforce.

The initial step will be to determine the parameters for gauging individual, departmental and organization performance and how this determines the incentive pay. Selecting the right performance measures is contingent on the following foundational principles being considered:

• Overall improvement in profits is the ultimate goal of almost every incentive plan.

• The plan should pay for itself through the additional value created.

• Individual, Group and Company performances are to be considered.

Use of Profit-Based Allocation and Key Performance Indicators (KPI) will take all the principles into consideration.

Under the Profit-Based Allocation, a percentage of the profits, 5%-10% (depending on the profit margin) will be divided among the employees at 15%-50% of their annual salary. There is no cap to value in this method because it is profit based. To factor for group and individual performances under this approach, benchmarks will be set for group contributions to the revenue stream and for individual performances. When these thresholds are surmounted the incentive formulas will then take effect. This will ensure there is group and individual accountability. To encourage further growth, incentives will be based on growth in profits and not on just the presence of annual profit. Although reviews of the Salary Ratio Method saw a maximization of the company owner’s allocation, many owners might prefer other methods (Manning & Napier, 2014). This method will appeal most to the all departments at the forefront of revenue generation for...