COMPENSATION AND EMPLOYEE ENGAGEMENT

How base wage and merit/cost of living cash compensation impacts employee engagement?

How base wage and merit/cost of living cash compensation impacts employee engagement?

Introduction

Employers, responding to the crisis in the economy, seem to be quite concerned regarding maintaining the employee engagement levels in organizations after they have experienced downsizing, increased work demands, lost bonuses, and wage freezes. Keeping the employees motivated in such situations whilst distinguishing that as soon as there are improvements within the economy the top talent might depart for different opportunities has surface a novel corporate battle-cry, which is employee engagement. The paper discusses the way in which base wage and merit/cost of living cash compensation impacts employee engagement.

Discussion and Analysis

Even though, a number of definitions of employee engagement could be found, however the definition that this paper would use is that employee engagement is normally explained as an increased level of employee's job satisfaction, involvement and commitment to the company. Employees that are engaged enjoy, value, and feel proud in doing their job. Such employee's are much probable of helping each other and assisting the organization in getting successful; stay with the firm more than those employees that are less engaged; share information with their colleagues; put in higher efforts in their works; and take extra responsibility (Riketta 2002, 2008; LePine, Erez & Johnson, 2002; Lazear, 1989). Lastly, engagement of employees and variables related to it like cooperation and commitment, have be observed as being linked with the overall performance of the organization (Schneider, Macey, Barbera & Young, 2009; Macey & Schneider, 2008; Harter, Schmidt & Killham, 2003). Even though, the main spotlight of the efforts for engagement has mainly been on non-financial rewards, programs of team-building, and surveys of employee opinion, structures of pay that are egalitarian are discovered as being linked to the employee's commitment, satisfaction, involvement, and cooperation (Pfeffer & Langton, 1999; Levine, 1991; Bloom & Michael, 2002), each one of them has been utilized as substitutes for employee engagement. Nonetheless, the above mentioned researches have not assessed the particular pay practices utilized by experts of compensation or made an effort for relating the programs of pay particularly to employee engagement.

In spite of the improving conditions of the economy, the employee engagement's lower levels continue being an importunate issue for a number of employers. As per a recent survey carried out by a consulting firm 'Mercer', approximately twice as many firms have reported decreased engagement when weighed against the survey conducted a couple of years back. Providing the profound recession and following slow resurgence this cannot be referred to as something unexpected. Post a primary amplification in productivity and engagement throughout the recession's initial phases, increased work and lower staff levels have corroded employee engagement. Limited opportunities of development, layoffs and pay freezes seize their toll.

As per Miss Loree Griffith who is the principal in rewards consulting business the practices that would have the utmost affect on the engagement levels of employees are the increases in base ...