When it comes to compensation, each company has its own way of acting; however, those that want to boost the business and recognize good employee results should adopt a meritocracy system, which allows for variable pay. That is the orientation ofCarla Martins, vice-president ofSERAC, a hub for corporate solutions, a reference in the accounting, legal, educational and technology areas.
According to Carla, remuneration is an important tool for retaining employees in any company, but it can be worked on to enhance certain objectives, such as recognizing employees' work and reducingturnover, contributing to team retention. "The company can adopt a monthly and annual meritocracy system, involving monetary recognition and praise, simply by establishing some criteria and rewarding those who achieved the best results," he/she/they suggest.
At SERAC, according to the executive, the monthly prize is given in cash, directly to the employee. "We believe that giving money in hand is like giving a gift. It's different from a gift card or receiving it directly into the account, as the money runs out quickly. And, besides the money, we praise the person's performance in public, so we acknowledge both ways," says Carla Martins.
The annual compensation, according to the SERAC vice-president, should have a higher reward than the monthly one and may involve the entire company and not be divided by areas or departments. "Everything depends on the size of the company and the required deliverables. In our case, we chose to establish criteria related to culture in the annual meritocracy award. We observe, for example, how people absorb our culture, how they treat other employees, and how they are perceived by them," she explains.
For Carla Martins, meritocracy is an interesting tool because it helps the organization grow consistently in terms of culture and employee retention. "The entire team becomes more engaged, and in the following month or year, a good part of the team starts to strive to be among the top positions. This helps the company improve in terms of culture and generates a benefit not only for the winning employees but for the business itself. There are even people who win multiple times because they understand the rules of the game and practice them consistently," he evaluates.
At SERAC, the practice of meritocracy and variable compensation started within the family and was enhanced and extended to the employees. "Our managers, for example, receive 100% variable compensation. Analysts receive a fixed part and a variable part, which is related to deliveries, behavior, etc.," explains Carla Martins.
