A Compensation Plan

A compensation plan for an organization has to be a total rewards system for the employees. What I mean by this is that, as an organization, you cannot offer something that you think is valuable to the employees and expect it to do what it is supposed to. It is supposed to drive them to do better in order to get the desired reward. The first step will be to know your type of employees so that you know what they value.

The first rewards that the organization should look into are rewards that benefit both the employee and the employer. The Internal Revenue Code has been encouraging employers to offer certain rewards to employees for quite some time. For example, an employer can offer a retirement plan or health insurance and they are able to deduct that amount of money they pay towards those items from their taxable income. This will reduce the organizations taxes that they have to pay. This is a win-win because they would most likely be paying that money towards taxes, but this way they get to reward their employees and encourage them to work harder and stay with the organization due to the retirement plan and health benefits.

Another benefit with purchasing health insurance that there are discounts in buying in bulk. The more employees the organization has the more of a discount they receive. This can work in many employer discounts like programs that give points or percentages off of purchasing specific items from a discount website company.

It is important to weigh all of the reward options. The organization has to first consider what is most valuable to the employees, and also consider the cost to the company. There can be a good balance that can work for both the employer and employee.