Employee Engagement's Place in Compensation Planning

As compensation planning swings into full gear, how top of mind is employee engagement?

In my post today on Compensation Cafe, I argue it should be. As I say in that post:

If the point of compensation is to pay employees fairly for work rendered, then doesn’t it makes sense to pursue efforts that increase discretionary performance above and beyond compensation?

Read more of my argument, including recent Gallup research on the latent fear, disengagement and consequentially worse performance in companies that have conducted layoffs or other actions during the recession.