Offering employees what they want

Segmentation allows employers to focus rewards on specific groups
By Sarah Dobson
|Canadian HR Reporter|Last Updated: 10/18/2007

As the Canadian labour market stretches to accommodate rising demand and diminishing supply, employee attraction and retention are at the top of the workplace agenda. As a result, many organizations are enhancing the segmentation of their workforce — offering different rewards for different employee groups — to better compete in the marketplace and make the most of their investments.

In the past, companies tied incentive plans, target bonuses or eligibility criteria to a job level or type of role to drive performance and align with competitive market practice, says Claudine Kapel, principal with Kapel and Associates in Toronto. But segmentation can also be effective in attracting and retaining employees.

“As the demographics come into play, with an aggressive population and tight labour market, organizations are going to become more sensitive to making sure they have an attractive employment offer,” she says. “The key is trying to make sure you understand what drives attraction and retention in different populations. Understanding from a broader perspective what employees value can offer insights in terms of how to make the most of investments in rewards.”