HOW TO INTERPRET RELATIONAL RETURNS FROM WORK
To understand this concept have a look on these questions first and try to answer all by yourself
Why do billionaires turn up for work every morning?
Why do some scholars and pundits share their knowledge by scribing for free on some websites?
Why do the financial advisors give the investments and financial advice for free through any social media platforms without charging a fee?
Because of the non financial returns i.e. relational returns which leaves an impact on the minds of people.
DEFINITION RELATIONAL RETURNS
Relational Returns are the non monetary psychological gains which an employee obtains from his employer during the term of his service for sustaining an employer with an employment relationship as a surplus to the Total Compensation received. It could be learning opportunities, social status, challenging work, and so on.
Basically it is a psychological return by the employer for an employee’s work during the term of service.
Why Relational Returns are seen as a reward and recognition?
Relational Returns are viewed as a non-financial returns from work, which definitely puts a substantial effect on employees’ behavior like for example - it gives confidence to the employee for his employment security, challenging work projects at workplace that aids learning and development opportunities for an employee giving immense personal satisfaction to an employee as a human being after successfully facing new challenges, teaming with great co-workers helps in personality development, receiving new badges, winning medals on the shoulders and adding stripes on the uniform sleeves, and so much more to add on.
Such factors are the part of a broader umbrella i.e. total returns rather than a total compensation.
Therefore, relational returns from work are also seen as recognition and status.
How does an Employee look at the Relational Returns ?
Being an Employee you believe in treating the compensation as something received at a moment in time. So you walk into the employer’s door, focus on the cash and health care offers and search for all the returns that makes the Compensation package as a lucrative lottery gain for you, thinking that the compensation is the only one of the factors affecting decisions about work and disregard many other factors.
What is the Strategic view of Employers?
An organization's compensation decisions are based on the Net Present Value.
A present value perspective shifts the comparison of today’s initial offers to consideration of future bonuses, merit increases and promotions.
Why miss this point? that sometimes few Organizations also tell applicants that at present, it is relatively low starting offers which will be overcome by larger future pay increases later.
Because the reality is that, in effect, the company is selling the present value of the future stream of earnings. And it is assumed by the employers that most of the applicants will apply that same calculation as given by the employer as the future increases required to offset the lower initial offers.
How Employees and Employers can build a symbiotic relationship through Relational Returns?
"The essence is that the network of returns is more likely to be useful if the bonuses, development opportunities and promotions all work together rather than working against one another".
The Organization should act as a Network of Returns with a huge umbrella that includes all different forms of returns at work including total compensation and relational returns for all generations with different age groups comprising of all genders. Where an employer should be mindful of designing this Network of Returns for an employee and on the other hand an employee should also be equally mindful of leveraging this Network of Returns.
Conclusion:
It helps not only the employee but an organization as well to succeed because when the front and rear wheels of your car moves in one direction giving a great mileage without any conflict and friction with the right people on right seats, reaching the right destination at the right time. What happens? you know better!!
Do you remember the Bestselling Book's Title by Jim Collins i.e. "Good to Great- Why some companies make the leap and the others don't..."
Time to wrap this blog, see you all in my next blog!
Thanks for reading.
