A total compensation statement is a document that states what an employee’s total compensation for the year is. This can be a simple spreadsheet or a more in-depth report. It is important to remember that many times, an employee’s compensation goes beyond just their base salary. It might also include information like bonuses and commission, paid leaves and PTO, car and phone allowance amount, and stock options. Other items that the document might include are travel expenses that the company pays for, company discounts, tuition assistance, and con-site child care.
There are many benefits to giving each employee one of these statements when they start their new job. It allows for more transparency, boost appreciation and satisfaction, and ultimately, leads to job retention. One way to care for the compensation of your employees is by using compensation management solutions, which make it easy for you to simplify compensation planning. Compensation management solutions also allow for better budgeting and decision-making.
Here is a more in-depth look at the advantages of providing total compensation statements to employees.
1. It’s just more transparent
By laying out all of an employee’s compensation, it shows them that the company is transparent and is not trying to hide anything from them. This also just makes it easier for employees to see their compensation clearly laid out as a convenience for them. These documents are easy to understand, and they will be able to look at the whole “big picture” of their compensation plan without having to go to HR to ask for things like travel expenses, tuition reimbursement, or a car allowance.
2. It boost employee appreciation and satisfaction
An employee who works for a company that gives them a total compensation statement is more likely to be appreciative of the company and have more satisfaction as an employee. They do not have to struggle to find out information about compensation, and will appreciate their company’s transparency. They will trust their employer more as well, and most likely continue to work where they do.
3. It leads to a higher retention rate
How would you feel if you found out for base pay and bonuses, but never knew about other company discounts or allowances that the company offers? If you found out a coworker was getting help with tuition and went back to school, you would probably feel cheated. A good employer lays out all of the compensation for an employee, including allowances and discounts, in order to give them fair access to those forms of compensation.
Compensation management systems are effective at helping you put these documents together and allowing your employees to fully understand their compensation. This is one form of HR technology that simply helps make a company great to work for.
Need more information on compensation management solutions? Let us know in the comments below!
