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Final Proposal

The Type of Compensation Mix that Retains Entry Level Employee

Introduction

Background Study

In this paper, we try to identify the kind of compensation mix that can help employers in motivating their employees in the current job. This, in turn, will also help the employers in finding the ways through which the employer will be able to retain the employees at the current job position. Through identifying these ways, the employer will also be able to improve the retention rate of the employees in the organization. The labor market has significantly changed in comparison with the last period of recession in the years 2001 - 2002. It is necessary to use new methods of employee retention and to emphasize on those methods, instead of the existing ones. Not all companies have recognized, however, that the new economic situation requires special plans in the field of human resource management. One fifth of the companies are not updated in their plans for retention of employees during the changes that occur in the economy. "One of the fundamental mistakes that employers make is the belief that their employees in connection with the crisis do not find another job. Such companies can drown in a flood of denunciations and threatens to defeat them in the talent market”. Costs associated with the departure of the employee are high. It is estimated that the total cost to replace each lost employee is two or three times his annual salary.

In situations where labor mobility is high, employers should particularly keep an eye on their staff retention programs. At the same time, they must bear in mind that managers often have the misconception about the needs of regular employees. Executives often consider that young people are much more interested in flexible hours. As workers age increases, the importance of gaining additional financial bonuses, as well as, additional health and pension benefits also increases. Financial inducements is an important part of any strategy for staff retention, but are critical motivators for non-wage workers, they enable companies to stand out on the market for talent.

Statement of the Problem & Significance of the Study:

Problem Statement:

The labor market has significantly changed in comparison with the last period of recession in the years 2001 - 2002. It is necessary to use new methods of employee retention and to emphasize on those methods, instead of the existing ones. This is because; in today's globalised world, employees have got more options to switch a job due to the growth of the industries. As a result of this, employees who are not satisfied with their current job positions, frequently shift to new jobs. This in turn has increased the employee turnover rate in the recent past, which has also added to the problems of the employer's. To study the different ways of compensation mix, in order to find out the possible solution to the retention of employees in their current job positions.

Significance:

The findings of this study will help the employers in identifying the best suitable compensation plans, ...