1. Health insurance is the largest component of most compensation packages.
2. Benefits such as health insurance, retirement savings, and flexible schedules help enhance employee loyalty to an organization.
3. One key to aligning compensation and strategy is to determine how much of employees’ compensation to place at risk.
4. Equity theory predicts that motivation is higher when pay is at risk.
5. Pay variability increases productivity regardless of the nature of work or assignments.
6. Individual incentives have the potential to destroy cooperation among employees.
7. Group incentives are not at risk because the synergy of a group ensures productivity.
8. Employees are not attracted to organizations that pay a specific level of pay, so all organizations should have some pay at risk.
9. An organization with a lead-the-market strategy will likely establish a higher compensation level than an organization with a lag-the-market strategy.
10. Dollar for dollar, benefits provide more value to employees because generally employees do not pay taxes on benefits.