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Why Your Employees Should Understand Their Total Compensation

19 million Americans are planning to leave their jobs this year, which

will cost employers an estimated $2 trillion in employee churn. How

can you make sure your valued employees stay? The answer is employee

engagement—motivating good workers to remain at your company, and

inspiring them to go above and beyond every day.

Engagement’s link to compensation

Employees are more likely to have high engagement if they feel

appreciated by their employer. A major component of the appreciation

factor is total compensation, including salary, bonuses, health

insurance, 401(k) matching and other benefits. According to employee

engagement expert Leigh Branham, “There is no more emotionally charged

issue for employees than what they are paid for their contributions.

What we make doesn’t just pay the bills—it measures our worth in the

most material way.” This is why inadequate compensation drives

employees away. It’s not necessarily because they can make more money

working at another company, but because they feel devalued and

unrecognized.

Show me the money

Whether or not you plan to increase employee pay and benefits in the

near future, communication is still critically important. Here are a

few best practices for discussing compensation in a one-on-one

conversation or performance review:

* Speak openly and honestly with employees about how pay is

determined

* Show employees the breakdown of their total compensation

package

* Explain that their compensation goes beyond their paycheck, and that

you are investing in their well-being through health and retirement

benefits

An employee who is not completely satisfied with his or her current

paycheck might be surprised to see the total investment you are making.

Paycor’s Custom Web Reporting application

allows you to see total compensation for each employee, including wages,

benefits and taxes. The easy-to-read format makes it perfect for

sharing in the context of an open conversation with each employee

about his or her compensation package. See an example report

here.

When employees understand you value them, they are more likely to go the

extra mile for you. Being transparent about the investment you have

made in their total compensation is an easy way to show your

appreciation for their dedication and hard work. Contact

us to learn more about Paycor’s Custom

Web Reporting, and start reaping the bottom-line benefits of higher

engagement and retention.

Sources: Cornerstone OnDemand 2013 Employee Survey, The 7 Hidden

Reasons Employees Leave by Leigh Branham