Part 1
Organizations need to track employee engagement to determine the levels of enthusiasm and commitment to different roles. Identifying talented employees is beneficial because it eases the burden of determining layoffs without hurting the productivity of the employees when profits are down (Bishop & Timmins, 2019). The bottom line to maintaining an enthusiastic and productive work environment is to employ engagement and flexibility in the process of appraising workers.
The first strategy is introducing variable pay to compensate employees based on their contributions to the company in addition to the expected salary. Variable pay recognizes the individual effort towards company profitability, safety, productivity, and corporate responsibility. Managers can ensure that they treat such employees as business partners so that they invest their full potential into the company. Such strategies are applicable in situations where the managers involve the workers in important decision making such as budgeting.
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Furthermore, organizations need to create a transparent communication network so that the workers clearly attach their roles in to customer satisfaction ( Shantz, Wang, & Malik, 2018). Most people report to work with no clear objective because they do not understand how their efforts produce outcomes. The monotonous routine reduces accountability due to closed communication channels between the workers and the bosses. By aligning their roles to company outcomes and sharpening their skills through on-the-job training, companies can reduce turnover rates for talented employees.
Constant employee feedback is also important in ensuring that organizations identify and keep their most talented employees. Managers are able to create a learning environment where employees develop and present new ideas that aim at increasing profitability (Kalmi et al., 2012). Encourage the best employees to start their own pet projects that align with the industries objectives. Offer facilitation to the piloting of the project so that they exploit their innovation and creativity while maintaining a role model role to their peers. Through this strategy, employees attach meaning to purpose and activate their ideas into action thereby feel job satisfaction.
Part 2
Variable pay is a retention strategy used by employers to reward their talented employees through gifting them with compensation for acting beyond their job descriptions. The main formats used include holiday bonuses, company sponsored services, tangible goods, profit sharing, inflating commission margins, and cash. In a company that is experiencing low profitability, the managers need to apply such as strategy so that they do not lose their most productive employees (Bishop & Timmins, 2019). Also, the strategy increases the motivation towards increased internal competition and overall productivity.
Employees must develop variable pay techniques because they bolster the net salary. Traditional generic benefits create an avenue for routine and boredom which reduces job motivation and subsequently increase turnover rates. ( Shantz, Wang, & Malik, 2018). Compensative benefits characterizing variable pay tailor the packages to meet the personal needs of the employee. Therefore, the employee knows that the employer values them and will be adamant to move to another company with no personalized benefits. They experience appreciation and maintain their enthusiasm so as to maintain the status quo and sharpen their vocational skills,
Variable pay bears intrinsic and extrinsic advantages to the company. In particular, different demographic characteristics appeal to different employees. For example, an older employee may benefit from a retirement plan package as opposed to younger employee who is just starting a family and may need an education plan package (Kalmi et al., 2012). The clarity of information on the ways in which employees earn such compensation improves the prioritization of specific goals that contribute to work productivity. It is also critical that workers that meet the set criteria share a fair reward because failure of adherence leads to lose of most talented workers. Furthermore, surveying the benefits satisfaction enables the human resources department to make desirable changes.
References
Bishop, K. C., & Timmins, C. (2019). Estimating the marginal willingness to pay function without instrumental variables. Journal of Urban Economics , 109, 66–83
Kalmi, P., Pendleton, A., & Poutsma, E. (2012). Bargaining regimes, variable pay and financial participation: some survey evidence on pay determination. International Journal of Human Resource Management , 23(8), 1643–1659
Shantz, A., Wang, J., & Malik, A. (2018). Disability status, individual variable pay, and pay satisfaction: Does relational and institutional trust make a difference? Human Resource Management , 57(1), 365–380.
