When it comes to workplace compensation, we’re seeing that many companies are finding a myriad of alternative routes to incentivize and pay for their employees’ performance. Typically, we have seen companies pay a salary which is a fixed paid amount given on a monthly or biweekly basis (but initially offered in compensation packages as an annual sum). Another usual form of compensation is an hourly cash wage. Wages are normally paid on a daily or weekly basis based on the amount of productive hours an employee puts forth. Other, perhaps more interesting, forms of pay are the Wall Street-type, motive-based payments (bonuses) which usually inspire employees to perform at a level above the norm in order to capitalize on the higher pay. In addition to these are legally required, indirect compensation protection programs such as retirement programs, health insurance, Social Security, paid leave, etc.
But what about new forms of pay? These are the ones that are incentivizing people in the workplace today– and we’re seeing them popup everywhere. We’re seeing that people are seeking employment with companies that are adding to the archaic system of direct pay with new, fresh ideas. Is cash not enough anymore? Do your employees want more things?
Here are just a few of the alternative compensation methods we find most interesting.
- Stock Options – Though not the newest approach in business, we’re seeing more and more companies adopt this compensation method. Stock options allow employees the right to buy a piece of, essentially, their business in exchange for excellence and outstanding productivity. Some companies simply offer stock and others think a little more outside of the box. For instance, a company focusing on agriculture may offer a piece of land to an employee as a stock option where the land here is representative of a piece of the business. Fashion tech founders, will you be offering your employees dresses and stilettos as your form of stock options? Perhaps you can.
- Gainsharing – Not to be confused with project incentives (where the outcome is the most important facet of the program), this is meant to improve performance and fortify the idea of team. These rewards are designed to increase profit by placing the emphasis on team building and responsibility sharing. For greater clarification, implementing a program like this into one’s company would look a little something like this: You assign two of your employees to manage your social media platforms for 3 months. Over that 3-month period you see your followers on Twitter, Tumblr and Facebook triple. This is awesome! What’s better is that they’ve now asked to work on future projects together because they have built a strong working bond that produces extraordinary results. Thereby learning the importance of producing great results in a team context and later reaping the rewards — and so are you.
- Social Capital – Compensation doesn’t always have to come in the form of money, bonuses, and rewards; more and more companies are allowing their employees to become socially rich. This is accomplished through flexible work schedules/non-traditional working shifts and working from home. Some believe that when you allow an employee to work from home, they become leisurely and less productive but, in fact, the opposite is true. While it may depend on the person, most of those who take advantage of working from home are self-disciplined businesspeople who work well alone and are self-starters. (Isn’t this what every job description in the world — or at least Fashion Tech — itemizes?) Simply put, compensating through social capital often allows for greater quality of life and therefore greater productivity for you/your company.
- Tuition Reimbursement – Molding an employee to become just the right contributor to your workforce could not be more valuable. More companies today than ever before are reimbursing employees for classes, programs, and entire degrees in fields that are pertinent to their business field. This ensures that there is loyalty from the company because they believe in an individual’s future value/marketability and in turn creates an indispensable investment in your labor force.
Alternatives to Direct Pay (aka cash) is what is shaping profitable and successful businesses of the future. The things that generate real incentive by improving quality of life, creating stronger teams, and investing in the future of your employees’ lives is what creates real incentives in the work place. Working in the companies of tomorrow has created greater opportunity for involvement and productivity — that is true innovation.
Third Wave Fashion has been your fashion tech think tank since 2011. We publish the first ever printed fashion tech magazine, Third Wave. Follow us on Twitter or subscribe to our newsletter to stay on top of the latest in fashion tech + wearables.
Image via Real Story.