Some policy makers think that a higher incentive package will attract better talent and that they should start paying new hires more than they have been. Most of them ignore the people who are already working for them and make very little or inadequate increments to their compensation packages. When newer talent comes in and gets higher compensation a discrepancy is created which almost forces people to leave as they begin to feel cheated by their own company. So at the beginning you get some good talent but you lose most of your experienced folks who end up going to the competition when the pay scales rise all over the industry. This is when a company should realize that they should improve incentive packages of the people that they already have so that even when pay scales rise their existing workforce does not move away. Most companies take a short term view on this and think that by paying only new hires more they can keep a tap on escalating costs. However they don’t take into account the attrition that this discrimination causes which in turn increases the hiring they have to do. They also end up neglecting the training costs and settling period associated with the extra hiring. They should take this in account and take an initiative to improve pay packages on their own. This also gives the employees a feeling of growth in the company and reduces the urge for a change.

The work environment is perhaps even more important than compensation packages. When a new employee joins a company he waits eagerly for his first salary check but after a while he starts taking it for granted and the compensation package is not on his mind till the next appraisal comes along. However it’s the time in between which determines whether he will stay in the company for a long period of time. So although a good salary help can attract talent it is not always helpful in retaining it.

Many companies find an easy way to increase productivity – pay more than the industry standard but also increase the work load. This looks good on balance sheets which show higher employee productivity but it in turn leads to a higher attrition rate. Employees start to feel burned out and eventually leave the company much earlier than they had planned to. Such companies end up becoming places for doing a crash course. Employees join to have a quick learning experience and then move to an easier job at a higher package. Managers at these companies should understand that complaining about the high attrition rate will not do anything as the company’s culture is making people leave. Some organizations think that improving work conditions means just taking away all hurdles which are reducing an employee’s time away from work. They are dead wrong. You don’t improve work conditions by asking the employee to work more. You improve the environment of the work place so that an employee works for the same amount of time but ends up doing more work in it. So even if they don’t change the complicated travel reimbursement policy they should remember to screen the latest DVD at the company auditorium every Friday. A good culture can go a long way in keeping employees happy. Employees really appreciate it when a company’s HR makes an effort to tie-up with the local pizza chain to get a corporate discount or when they put up posters about the next football game. Even teams event should be held on weekdays so that employees feel that it is a break from work and not an obligation which is keeping them away from their families on a weekend.

These are some points which might not turn up in the latest employee satisfaction survey as most of the time even employees don’t realize what they actually want in a work place. They end-up letting the organization decide what they are to be given because they were unable to communicate what they really needed in the first place.