Different Types of Compensation You Can Give Employees

Compensation is one of the best ways you can show your employees they are valued. Companies that offer different compensation options are more likely to maintain long-term employees. Do some research into different compensation options, and decide which one best suits your business.

Retirement Matching Contributions

This type of compensation helps your employees with their 401k plan. It also encourages them to save up for retirement. With a matching contribution, you can choose to match a certain dollar amount or percentage of your employees’ elective deferral contribution. This is beneficial to employees because it gives them more money for their retirement, but it also makes your employees feel valued. Companies that offer these contributions are also much more likely to attract potential employees as well. These contributions can also be tax deductible, to a certain limit. 

Company Equity

Offering your employees equity within your company is another great compensation option to make them feel valued. Having equity also helps employees become more invested in the outcome of the company, and more motivated to work hard. Depending on what business structure your company is, there are different ways you can do this. Choosing a C-corp is ideal for issuing stock to employees. If your business is a startup, you can offer your employees either restricted shares or stock options. Both of these options are appealing to potential employees who can help your startup be successful. For businesses in different stages, other equity options are available.


Bonuses are another common compensation that companies give their employees. Bonuses can be offered for a myriad of reasons: as incentive for joining, based on performance, once they reach a certain milestone, etc. This is an incredibly flexible compensation option, which is helpful for many businesses. You can decide internally how to reward your employees for their hard work. Employees are more likely to stay on if they receive bonuses, and prospective employees look for businesses who offer bonuses. There are also many different types of bonuses you can offer. Whichever one you pick, it will help your employees feel valued.

One of the best ways to maintain a long-lasting team of hardworking employees is to offer them compensation. These are small actions you can take as a business owner that show your employees how much they are valued. Decide which option best suits your business. Your employees will thank you.

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