Compensation management is a very important element of human resource management. It entails giving monetary and other forms of benefits to employees as payment for services offered or reparation for a loss or injury suffered (Barber, Dunham & Formisano, 2012). Most organizations use their compensation strategies to motivate their employees by offering them a number of benefits. One of the challenges faced by contemporary organizations is finding the most effective ways of motivating employees.
This challenge entails finding an effective compensation management strategy that allows the employers to recognize and reward employees depending on their results (Markham, 2000). In addition, the compensation management plan also serves as bait to highly qualified and skilled employees seeking to work in a particular organization. Every organization desires to have a bright workforce that will guarantee the best output and high quality outcomes (Becker & Gerhart, 1996).
Over the last couple of years, Google has built a reputation in the corporate world for its effective compensation management plans that have made it one of the most desirable workplaces (Scott, 2008). Both former and current employees of Google have many positive things to say about the search engine giant with regard to its human resource management strategies. Google is a large company that has invested a lot in its workforce through essential benefits such as health insurance and retirement benefits (Barber et al., 2012).
The characteristic element about the company’s compensation plan is the fact that it is part of its corporate culture and identity. Google values its employees and is committed to taking care of all their financial, emotional, social, and physical needs (Scott, 2008). This is part of their policy with regard to making life better and easier for everyone associated with them.
Google has one of the best employee benefits packages in the contemporary world. One of the main objectives of compensation management is increasing the employee retention rate by keeping their motivation levels high all the time (Steiber, 2014).
First, Google uses its benefits to remove any barriers that might limit the ability of its employees to enjoy their time within and outside the workplace. The company has a well-designed plan that focuses on coming up with unique ways that can boost the health status of their employees for maximum output (Steiber, 2014). The plan is designed in a manner that everyone that works at the company ends up being a better person by simply using the resources available in the workplace. One of the most important things that employers ought to consider during compensation management is the fact that the needs and interests of employees keep changing over time (Scott, 2008).
Therefore, the benefits plan should also keep changing in order to match the needs of the employees at a particular time. At Google, the compensation management plans apply in a manner that the benefits work for the employees (Steiber, 2014). Google encourages open conversations with its employees in order to understand their varying needs and the manner in which they can be met in a satisfactory manner. This element extends to its commitment towards providing benefits that take care of its employees, along with their family members and beneficiaries. Google is one big family that values the important people in the lives of their employees (Scott, 2008).
This is the reason they have a number of support programs and amenities that the family members of their employees can use whenever they are in need.
Google offers a number of benefits to its employees across the world. The first category of benefits involves the health of its employees and their family members. Google has hired physicians and nurses whose primary role is providing on-site conventional medical services (Steiber, 2014).
Therefore, if any employee gets sick and is in need of medical services they do not need to leave their workplace in order to be treated. In addition, Google provides all its employees with health care insurance that aims to keep them healthy and happy all the time. The second category of benefits involves the travel needs of the employees. Google provides its employees with travel insurance and emergency assistance that also includes their family members (Steiber, 2014).
The plan also involves personal vacations taken by the employees and aims to improve their emotional and mental stability as a way of driving performance. Google also considers the members of its workforce that have young families (Steiber, 2014). New parents working at Google are often given ample time off their work schedules to be with their children. In addition, Google also gives the new parents extra money that aims to help them welcome the newborn baby.
Google is also focused on having a highly skilled workforce and have developed programs geared towards helping their employees continue with their learning while still working (Steiber, 2014). The company mainly reimburses its employees for degree programs related to their areas of specialization. Google also offers its employees free legal aid. Google employees across the world benefit from free legal advice that comes in handy whenever they are involved in legal tussles relating to their work or personal lives (Steiber, 2014). In addition, Google employees working in the United States often get common legal services at a lesser cost.
Giving the right support to employees
According to management experts, the right course of action with regard to effective compensation management is giving the right support to employees. The management model used by Google is very different from the traditional one that most organizations use (Scott, 2008). Traditionally, management theories argue that organizational leaders should focus their attention on delivering results because at the end of the day it is the main driving force within the workforce.
However, Google applies a different approach that entails giving the first priority to the people delivering the results (Scott, 2008). Motivating the employees is very crucial to organizational success because they always have additional drive to give their best output. According to Google’s philosophy, the main motivation behind their compensation management strategies is creating the happiest and most productive workplace in the world. According to management experts, this philosophy alone is enough to drive the employees to optimal production because they will feel valued by their employer (Scott, 2008).
Another course of action that organizations should take in order to motivate their employees and achieve effective compensation management is giving them a voice (Becker & Gerhart, 1996). All employees value a democratic workplace environment where they can easily voice their concerns, interact with their leaders, as well as give their recommendations about anything of concern. Google has been very effective on this front, because it advocates for a very democratic workplace characterized by the ability of employees to interact and develop their careers without any limitations (Steiber, 2014).
Every Friday, Google employees hold forums that are attended by their seniors who respond to any concerns that they have regarding their needs and interests. The forums are also used for sharing ideas and thoughts about various projects within the workplace. The company also surveys the performance of the organizational leaders by asking the employees to fill forms and questionnaires that give information about specific individuals (Steiber, 2014).
This is a good course of action with regard to encouraging good relationships in the workplace between managers and their subordinates. Managers that score poorly are often offered the right support through coaching in order to improve on their weak areas pointed out by the employees. Management experts argue that limiting the freedom of employees within the workplace is one of the main factors that contribute to low satisfaction and motivation levels (Becker & Gerhart, 1996). Therefore, it is important for organizational leaders to ensure that all employees are engaged in the workplace activities.
Every organization needs a solid action plan in order to achieve effective management of employee benefits. The action plan should develop out of the organization’s corporate culture and the needs of its employees. Google is a good example of an organization that has an action plan that has been very effective in terms of compensating employees for the work the do and the value they bring to the organization (Steiber, 2014).
The main characteristic element of the action plan is transparency. Google believes that an organization of its caliber should gain the trust and loyalty of its employees by creating a transparent workplace environment (Scott, 2008). This makes employees feel that they are trustworthy and can make reasonable judgments regarding any aspect of their work. This in turn helps to boost their confidence and motivation towards achieving their objectives. An effective action plan also entails engaging employees in the decision-making process. At Google, employees have full access to the information discussed by the board of directors before a final decision is made (Steiber, 2014)
. The main reason for doing this is to keep the employees happy and satisfied with their work. They feel valued whenever their input during the decision-making process is sought. Studies have established that trust is one of the intrinsic benefits that an employer can give to the employees without comprising its ability to manage the huge financial burden that comes with compensation management (Becker & Gerhart, 1996).
Freedom is also another important element of the action plan that organizations should take into consideration during compensation management (Barber et al., 2012). Management experts argue that organizations can effectively increase the productivity and satisfaction levels of their employees by giving the enough freedom to decide the time and manner in which various tasks are completed within the workplace. However, the most important thing to consider when giving employees the freedom to decide their work schedules is their commitment towards meeting the quality standards and meeting the deadlines (Barber et al., 2012).
Google has effectively implemented this element in its employee benefits plan, where employees can organize their work depending on their schedules. The employees are allowed to take relaxation breaks in between their work provided they do not compromise their level of productivity and quality of outcomes (Steiber, 2014). Google often gives its employees the freedom to incorporate fun activities into their work schedules. The activities that the employees choose should always be ethical and within the law to avoid denting the company’s reputation. Management experts argue that such incentives play a crucial role in keeping the employees fresh, happy, and highly motivated to work (Dutton & Ashford, 2005).
An effective action plan should also be flexible in terms of allowing employees to work on different projects at the same time (Becker & Gerhart, 1996). This should also entail encouraging employees to choose projects that promote the organization’s corporate culture. According to management experts, having a compensation management approach that allows employees to introduce their own unique ways of completing tasks helps in improving productivity and the satisfaction levels. Google has a very flexible workplace environment that allows employees to work at the time they like, wear clothes that make them feel comfortable and confident enough, as well as the privilege of bring a pet to work (Steiber, 2014).
Psychologists argue that such working conditions are very effective in increasing the output of employees because they are always relaxed and dedicated to their work. This is one of the main reasons behind the high levels of ingenuity among Google employees because their fun workplace environment gives them a chance to think beyond their usual responsibilities (Scott, 2008). Effective compensation management also entails giving employees inspiring and challenging roles. Employees are highly motivated to receive the various benefits offered by the employer when they have the ability to break the monotony that comes with the nature of their work (Dutton & Ashford, 2005).
Therefore, employers should introduce a policy that gives employees a certain percentage of their time within the workplace to do anything of their choice that can help them relax. Psychologists argue that routines have many negative effects on the ability of employees to be creative and remain motivated towards achieving their goals on time (Becker & Gerhart, 1996).
Conclusion and recommendations
Employers have an ethical responsibility of providing employees with the best working conditions and a deserving compensation plan. One of the elements that make an organization’s employee benefits plan to be effective is the ability to incorporate its corporate culture and work philosophy with compensation management strategies. Employee needs and interests vary and often keep changing depending on their position in life at a particular time.
Therefore, employers should consider this element while developing a compensation plan. The biggest benefit that employers can give employees is trust, as well as a democratic and flexible workplace. This allows them to make their contribution in the decision-making process, an element that plays a crucial role in boosting their confidence, loyalty, and motivation. Organizations can do several things to improve the effectiveness of the compensation plans.
First, it is important to provide employees with opportunities for fun within the workplace. This will play a crucial role in increasing their productivity and ingenuity levels because they will always be relaxed while at work.fun should be a regular aspect of work within an organization.
Second, organizations can try to come up with unconventional office designs that help to create a more interactive environment. For example, Google has built a reputation for having unique office designs that reflect their culture and philosophy that revolves around creativity and connecting with people. Therefore, organizations should try changing from the conventional office designs and coming up with those that reflects their work values. This plays a crucial role in boosting the motivation of employees to work, as well as increasing the satisfaction levels.
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Dutton, J.E., & Ashford, S.J. (2005). Selling issues to top management. Academy of Management Review, 18, 397-428.
Markham, S.E. (2000). Pay-for-performance dilemma revisited: Empirical example of the importance of group effects. Journal of Applied Psychology, 73, 172-180.
Scott, V.A. (2008). Google. New York: Greenwood publishing group.
Steiber, A. (2014). The Google model: Managing continuous Innovation in a Rapidly Changing World. New York: Springer Science & Business Media.