Yes, incentive compensation is a major asset in terms of company appeal and talent retention, and can enhance your employer brand. However, the employer brand is not determined by this one factor alone. Here’s why.
WHY YOU SHOULD BE THINKING URGENTLY ABOUT YOUR EMPLOYER BRAND?
A good employer brand aims to achieve three main objectives:
- Attractiveness: consolidating the appeal of the brand and the company in order to master the development of its reputation
- Integration: positioning the company as a sought-after employer, attracting talent, facilitating recruitment
- Loyalty: create loyalty and foster team attachment in order to reinforce their motivation levels and performance
In order to respond effectively to the issue of company appeal and talent retention, prioritize investment in your employer brand. In a broader sense, your employer brand helps your staff to:
- better understand your company’s mission, and get on board with it
- get behind your company values, and contribute to your business strategy
- attract the best candidates, or at least improve the proportion of suitable candidates
- develop a sense of pride and belonging among your staff, particularly by enhancing their working environment, etc.
Eda Gultekin, Head of Sales at Linkedin, is a staunch proponent of this approach. Way back in 2011, she had already calculated that investing in the employer brand could save companies money - in her blog article “What’s the Value of Your Employment Brand?”. She writes: “The cost per hire is over 2 times lower for companies with strong employer brands. Companies with stronger employer brands have 28% lower turnover rates than companies with weaker employer brands.”
In short, the employer brand can be the miracle cure to increase your company’s appeal by encouraging healthy internal competition - as long as it is not imposed, but collectively developed via coherent messages driven by the senior management and also the HR, Marketing and Communications teams – and, of course, the employees.
A good employer brand will naturally improve a company’s performance through motivated teams, shared values, and a more pragmatic asset: incentive compensation.
HOW VARIABLE PAY CONTRIBUTES TO A GOOD BRAND IMAGE?
Incentive encourages autonomy within your team.
If you want your bonus scheme to help you stand out, take care to find the right balance between collective and individual raises.
Your Incentive policy presents the image of a company with enough self-confidence in its performance to give its staff the resources to go further. This further underlines the role of variable pay as a motivator for the brand’s collective and individual performance. Elsewhere, compensation studies often show, somewhat unsurprisingly, that candidates having recently changed jobs or planning to do so are looking primarily for a more attractive global package.
One notable example is Decathlon, which has an excellent employer brand (coming in 4th in the 2016 Great Place to Work awards). Once reason for this is its celebrated “Passionate since” campaign, which highlights its employees’ passion for sports, but also the awarding of advantages such as target bonuses, incentives, and fringe benefits (nursery, staff canteen, etc.). At Decathlon, all employees receive bonuses based on the company’s results, whichcan increase salary up to 20%.
INCENTIVE COMPENSATION IS JUST ONE ASPECT OF A GOOD EMPLOYER BRAND
On its own, incentive compensation is not enough to resolve issues concerning company attractiveness or an inability to retain the best profiles. In the same way, it is not the only way to increase motivation and effectiveness among your sales teams.
A number of studies on the subject of sales team motivation exist, but we’ll point in particular to one using Maslow’s pyramid of needs, which correlates with the subject of this article: an employee who feels happy, recognised by the company hierarchy and involved in a strategy they can understand will be a high-performance employee.
The particular attention paid to individuals and valuing their efforts are key aspects in the motivation of your teams: in particular, the possibility of receiving training and evolving constantly within the company. Here we may mention the “McDonald’s effect”, in the positive sense of the term. The “King of the Big Mac” can present itself not only as the biggest net job creator in France, but also as a company that makes social mobility a reality for its employees. Because of this, its employer brand gains value.
Through this is just one example among many, we want to show how important it is to think globally, engaging a number of motivational drivers (including incentive scheme), all of which contribute to your employer brand and which can’t function without one another.
If you too would like to benefit from improving your employer brand, particularly through coordinated actions regarding your bonus schemes, contact us.
