Personalize Components of Compensation to Help Drive Appreciation

My son, William, works at an ice cream shop that employs people with Intellectual and Developmental Disabilities, and it is the happiest ice cream shop on the planet.   William is so proud to tell people that he works at Howdy.  He is also happy to pick up a paycheck and take it to the bank with a sense of accomplishment.

One day I took William to the bank so he could cash his $38 paycheck.  The teller asked William how he would like his $38, and he proudly looked at her and said, "in 50's".  We all had a great laugh.

I love watching William find joy in so many things that most of take for granted.  The paycheck story makes me think about how much emotion was lost when we moved to direct deposit.  The old paychecks also included a paystub that reminded us of the hours that we worked, any incentive compensation or overtime that we earned, and how much of our check is going to pay for benefits and is going into the retirement plan.  Now, with direct deposit, we need to log into our bank website/app to see what was deposited and then look at our benefits intranet site to look at the other information.

In order to bring this emotion back and truly connect with employees, here's an idea:

      What if employers took the annual merit component and allowed employees to choose where that money goes.  It could go directly to the student loan they are trying to pay off.  It could go to the 529 college savings account that they are focused on building up.  It could go to an HSA to cover out of pocket healthcare costs or take advantage of the triple tax benefit.  Or it could go straight into a bank account to either build up Emergency Savings or simply treat it like income.  Either way, having the employee involved in the decision makes this compensation much more personal and rewarding.  A reminder of this reward will happen every pay period.  Also, any money contributed to a qualified student loan is tax benefitted to the employer and employee with no payroll tax (FICA) up to $5,250 per year.

Let's work together to bring joy back to some of the things that we take for granted and build closer ties with employees by meeting them where they are in their personal financial journeys.

Oh, and if you happen to be in Centennial, CO, be sure to stop by Howdy Homemade Ice Cream and say hello.