High-performing corporate cultures use non-traditional value propositions to attract and retain top talent, according to a recent study compensation by Towers Perrin, a national human resources consulting firm. Companies that are deemed high-performers are those with total shareholder return (TSR) in the top quartile, based on a three-year comparison of TSR across the survey sample of 770 major U.S. companies.
These companies take an integrated view of rewards and compensation that include traditional, quantifiable factors like salary and benefits as well as non-traditional elements like opportunities for career development, challenging work and a supportive culture. For example, high-performing companies give their top talent a larger share of merit budgets, compared with other companies. In addition, these companies allow performance ratings to dictate employee stock option participation and variable award sizes, unlike the majority of other companies.
Other characteristics of high-performing companies include:
- The companies with the highest pay levels are not necessarily the most successful while high-performing companies tend to pay average base salaries.
- Stock options are used more broadly as incentives (52%) as opposed to other companies (29%) that tend to use these options as retention devices.
- Employees who make the most valuable contributions are more aggressively rewarded with above-average raises that are two to three times higher than other companies.
(Towers Perrin, Joe Conway, 914/745-4175)