ased salary increases. This is an effective way to provide financial recognition, especially to those individuals whose base salary is already relatively high. The lump sum merit award must be re-earned each year and is usually paid during an annual salary review period.Although paying all employees higher than average salaries and bonuses would seem to be a pay strategy that would attract the best employees, there are several drawbacks to this approach. Employees who receive higher than average compensation may be less willing to do the necessary work associated with the job, but will focus more on the menial tasks of the job function. If all employees are paid higher relative to the market, then there's less room for salary differentiation between the best performers and the average performers. Also, if a highly paid employee performs poorly and termination becomes necessary, it can become a problem for the organization.Regardless of which method is used, an organizations compensation strategy should focus on allowing for a diversity of skills and styles, differentiating in pay between the best performers and less valued performers, and providing career advancement opportunities. BenefitsMore than ever, employers are looking for new ways to provide the best employee benefits without exceeding their budgets. Employee benefits such as medical, dental, and vision coverage, life and disability insurance, and retirement plans can help attract and retain the best employees. According to a 1999 survey by the Society for Human Resource Management, other frequently offered fringe benefits include 401(k) matches, relocation assistance, educational assistance, year-end bonuses, domestic partner benefits, and a company car. Paid vacation is among the most commonly offered leave benefits. However, time off has yet to register among employers as a retention tool. Nationwide more organizations are experimenting with a smorgasbord of fringe bene...
