Effective Compensation Strategies for Employee Motivation
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Compensation is considered a most important factor in workers' decisions to change companies.
1. Compensation Concepts and Components
Compensation is often the most direct motivational factor, encompassing:
1.1. Maslow's Hierarchy of Needs and Motivations (1943)
- Salary
- Social Benefits
- Status
- Recognition
- Promotion
1.2. McClelland's Theory of Three Employee Needs (1962)
- Achievement
- Affiliation
- Power
1.3. Herzberg's Dual-Factor Theory (1968)
- Hygiene Factors: (neutral or demotivating)
- Motivating Factors: (motivational)
1.4. Motivation Factors (Juan A. Pérez López, 1993)
- Salary
- Social Benefits
- Status
- Recognition
- Promotion
- Service
Other Compensation Elements:
- Vacation Days
- Company Expenses
- Health Coverage
- Company Pension Fund
- Company Car
- Flexible Timetable