The Competitive Advantage
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13 ธันวาคม 2013
Employee engagement is increasingly important to improving or securing a company's leadership in the market. Currently employees and a company's intangible assets make up 80 percent of a company's competitive advantage.
Employee engagement is the official term used by talent developers to describe the process of motivating employees in order to increase employee retention and reduce turnover. While products or services can be more easily duplicated than ever before, a talented, passionate and committed workforce cannot be.
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Engaged professionals.
Engaged in the the war for talent, companies struggle to attract the best college graduates and most talented workers on the market. Two methods of motivation stand out: compensation and (tangible) benefits. Compensation comes in several forms: Base pay, variable pay and differential pay are the most common.
While most workers are paid a base pay or a fixed salary or wage, variable pay is another form of compensation. It is variable because it is not a set, guaranteed amount. Instead it is usually performance-based. It is used as an incentive for employees to increase sales, or reduce costs. An employee might earn a commission on each sale, or a lump-sum bonus for overall performance at the end of a particular period.
If an employee has to work a less desirable shift – a nurse working the night shift, for example – then that person might receive a higher pay rate than a colleague working the day shift. This is called differential pay.
Benefits are also intended to act like bonuses for hard work, or to attract the best workers in an industry. Profit sharing and or gainsharing are two types of monetary benefits.
Profit sharing is when a company shares its profitability at the end of the year, usually in the form of company stock or a bonus payment. Gainsharing is like profit sharing, but it is based on productivity, not profitability. So if a team saves on operational costs, the company returns some of the savings as a reward to its employees.
Fringe benefits are a type of non-monetary benefit. Also called perks (short for perquisite), these are extras a company offers. They can be things like a company car, an in-house kindergarten, a fitness studio, a cafeteria and continuing education or employee development programs.
Despite the appeal of a fancy car or fat pay check, employees are actually motivated the most by intangible benefits, which include more control over work processes, involvement in decision making, nice colleagues and the occasional pat on the back for a job well done. These don't cost a thing and can dramatically increase competitive advantage.