Unique compensation components

The compensation components are heavily standardized on the job market and just several industries can afford to provide the benefit of the additional compensation component to its employees and managers.

The compensation components are extremely expensive and they are a real part of the costs of the organization. Just the organization with the sophisticated products or services can afford to carry the additional costs. The benefit of the additional compensation component is extremely questionable.

The unique compensation components usually start to erode and they are introduced in the organization competing in the same area. The unique compensation components spread across the whole industry as the organization compete for the same talents and they hire employees from the competitors. The job candidates asks for the same compensation components or they want to have the lost compensation components to be compensated in other parts of their salary. At the end, the organization have the same mix of the compensation components and higher personnel costs with no advantage.

The organization has to be careful in the introduction of the unique compensation component as it does not have to bring the full benefit expected from the introduction. The unique compensation component has to have a strong retention factor and it is pretty hard to find a new one, which is not currently used. The projection of the introduction costs has to be done and a tough discussion needs to be held.

The HR has to be aware, that the introduction of the unique compensation component is much easier than the cancellation of the compensation component. Some employees can have a lot of their personal income from the compensation component and they are not willing to lose such a nice benefit from the organization. All the compensation components should be introduced for a limited period of time and just the most successful compensation component can survive its trial period.