Fred C Church

A report from the HPO Center suggests that employee benefit and compensation plan design should emphasize fairness and simplicity.

According to Human Resource Executive Online (HREO), complex reward systems and methods of compensating workers may be more likely to lead to perceptions of unfairness and inconsistency. This is partly because the reasoning behind them may be more difficult to convey to employees.

In contrast, simple systems may be more easily explained and implemented. Applying them is more likely to be perceived as fair. Because they will generally take less time to design and put into use, they may be easier on the benefits and HR management personnel at the same time.

With some organizations pursuing a business insurance policy that emphasizes preventive and wellness measures to improve employee health and decrease insurance costs, this may also apply to incentives used in such programs. Consistent and fair rewards encourage participation, whereas the perception that rewards are arbitrary or uneven is likely to discourage it.

One expert told the source that avoiding that perception relies largely on communication. That is why managers may find their time is better spent implementing and explaining a simple system rather than designing a complex one.