In Segal Sibson’s 2006 survey of employee satisfaction, employees responded that their overall satisfaction with their benefit plans was droppiong.
Satisfaction with their pay level dropped from 66% in 2000 and 2003 to 55% in 2006. In terms of benefits, I was surprised to see that healthcare benefits didn’t have the largest drop, it did drop to 54% from 60% in 2003, but the largest drop came in retirement benefits, dropping to 42% all the way from 56% in 2003.
An interesting point that Segal Sibson made was that one company in particular had made a huge investment in retiree medical coverage, but very few of the employees (even those nearing retirement) knew about the benefit.
Here are their tips to improve employee perception of your compensation and benefits programs:
Step 1: Inventory rewards. Conduct a full, realistic inventory of your rewards and pay attention to how they compare to the market for talent.
Step 2: Measure investment. Calculate the current level of investment in each rewards element to determine their competitiveness and the return on changes in each investment.
Step 3: Increase information. Explain the full suite of rewards, and measure employees’ level of understanding, satisfaction, engagement and turnover intent.
Step 4: Implement improvements. Make the intended suite of rewards “real” by ensuring that they are implemented and executed with excellence.
Step 5: Measure impact. Assess desired outcomes, such as engagement retention and productivity, and examine the return on investment produced by changes in the rewards package.
If you read their report, you will find much written about what they call the “rewards of work” which are: Affiliation, Compensation, Benefits, Work Content and Career. They rightly mention that these elements and even certain aspects of the elements will be more important than others to an individual.
The one area they don’t address in much detail is how they measure what an employee wants when it comes to rewards of work and how this information could be used in helping reduce employee dissatisfaction. I would encourage the use of objective assessments to measure an employee’s reward structure along with their motivations.
Segal Sibson makes the statement that employees will, within limits, substitute one reward for another. I would agree with this statement in part, but when you look at rewards, how d you know if offering an individual higher pay will reward them? This reward would work if their material possessions reward was intense enough to engage them. But what if their top reward is the opportunity to do meaningful work? Hence the need to assess each employee so that you know the rewards that are most meaningful to them.