elements of total rewards
compensation, benefits, worklife, performance and recognition, development and career opportunities
total rewards approach TRA
attract, retain and motivate
intrinsic motivation
linked to ee sense of achievement, respect for whole person, trusta nd appropriate advancement opportunities,
extrinsic motivation
associated with rewards that are tangible like pay
employee engagement
behavorial and emotional and attitudinal
behavioral engagment characteristics
working hard, working with accurracy, going the extra mile, performing at optiminal level, executing, being productive, becoming resilient, solving problems
emotional and attitudinal engagment characteristics
aligning of one's goals and values with those of the organization; connecting, committing, showing passion, feeling invested in outcomes
advantages of TRA
higher profitability, lower labor costs, greater flexibility
Total rewards strategy
art of combining the five elements to achieve optimal motivation. identifies: desired competitive position, appropriate labor market position, optimal mix of total rewards elements for each group, ways each element can be earned and allocated.
Key players in Strategy Development
Sr Management, Boards, HR leadership, EE's, outside consultants.
Elements of compensation
fixed and variable pay
Building a Job Worth Hierarchy
job analysis, documentation and evaluation, job worth heirarchy and this is used to create a base pay structure
Why conduct a job analysis
develop JWH, document for training, performance apprasials, identify job familes and career paths, identifity qualifications for posting, complaince,
Types of Job Documentation
Job Analysis questionaires, job family matrices, job descriptions
job descriptions
include the general nature of the work, level of the work performed, job specifications
Market Based Job Evaluation
common today, collection of data from external to the organization used to help create the base pay structure
benchmark job
standard job used to make comparisions, at least 50 of jobs should be benchmarked, 70 of the job content must be similari
content based job evaluation
Nonquantitative methods and quantitative methods
non quantitative methods or whole job method
Ranking is the simpliest form. classification method compars job on the whole job basis
quantitative methods or factor methods
point factor or job component approach
JWH
indicated the percieved value of the jobs in relationship to each other in the organization. establishes relationships between jobs. helped to determine value of jobs
Base Pay
fixed pay paid to employee for performing specific tasks; varies by country, bottem line fixed pay practices need to be based on competitive strategies for each country
components of base pay
policy, grades/bands,midpoint differentials, pay ranges, midpoints,
broadband pay ranges
spread may be 100% to 300%, from min to max
types of base pay
salary, non-exempt/hourly rate, piece rate
types of pay adjustments
merit basedc, skill based, compentency based, step rate, lump sum payment, general increase, cost of living increases, adjustments (equity or market based) combinations, automatic progressions, pay for performance
differential pay
shift, holiday, weekend, expatriate, geographic
Variable pay
pay at risk, gainsharing programs, profitsharing programs
design considerations for variable pay programs
eligibilty, types of plans, formula or performance target, payouts, performance measures
Types of variable pay
commission, bonus, incentive plans, profitsharing, performance sharing, equity
Commissions
sales incentives matched to responsbilities, usually one of these three categories: customer identificiation, customer service, customer persuasion.
bonuses
DISCRETIONARY - annual and spot
Incentive plans
group or organizational unit, based on predetermined measures, payouts in lump sums, usually % of base
Profit Sharing Plans
rewards based on financial performance, employee identification with organizational success, pays out when organization meets goal
performance sharing plans
rewards based on performance of a combination of quantitative or qualitative measures. objects to increase ee identification with org success, increase ee understanding of what is important to the org,
Equity
long term incentives such as stock or shares. time periods based greater than 12 months, can include stock options, stock grants, restricted stock, performance unit plans
Global Equity based rewards
things to consider: taxation to the employee, tax deduction to the company, exhange rate flux, local registration of stock/shares, intergration with other benefits, employee apprecation.
Benefits
income protection programs, pay for time not worked programs
Income protection programs
designed to protect the standard of living to the employee. Some mandatory: unemployment, worker compn, social security, disability. Voluntary: medical, dental, mental health, vision, survivor benefits, disability, retirements.
Pay for time not worked programs
designed to protect employee's income flow while at work and not at work
factors influencing benefits
corporate philosophy/business objectives, competitive practices, regulatory environment, taxation, ee demans, costs, demographic changes, perceived value, desire for choices
Health Care benefits: Income protection
variations by region, sources of health care: Gov't or private programs. Dental, vision or hearing plans
Medical Plans design components
deductiables, co-insurance, co-payment, usual and customary, out of pocket maximum, coordination of benefits
Welfare Benefits:Income protection
Death benefits, disability, long-term care benefits
Retirement and Investment Plans: Income protection
defined benefit plans, defined contribution plans, hybrid plans
defined benefit plans
provide better benefits to longer term employees, benefit based on formula that considers pay and service
Defined contribution plans
characterized by employee and employer contributions to individual participant accounts
hybrid plans
combine the elements of defined benefit and defined contribution plans. Cash balance plans, pension plans
Retirement benefits
vary by region, often goverment funded first - in usa that's social security.
Pay for time not worked programs: at work
rest period, wash time, travel time, etc
Pay for time not worked programs: not at work
vacation, holiday, personal leave, jury duty, sick time, bereavement, sabbatical,
Paid time off banks
combines separate programs into one block of time
severance allowance
continuation of employees salary after termination
Work Life
caring for dependents, supporting health and wellness, creating workplace flexibilty, financial support programs, creative use of paid and unpaid time off, community involvment programs, culture change initiatives
work life programs
satisfy the intrinsic needs such as control over one's work environment
creating workplace flexibity
FWA - flex time, compressed work weeks, work redesign, career flexibility
Financial Support Programs
Voluntary benefit programs - LTC, domestic partner benefits, financial services, tuition assistance, resources and referrals - legal referrals, group insurance discounts, seminars, discounts, housing counseling
Creative use of Paid and unpaid time off
time to spend with family and friends. examples: vacation sharing, emergency flexiblity, furloughs, paid time for community service. .
Community involvement
Corporate citizenship -doing good in the community in order leave banks, disaster relief funds,
external outreach: Community Involvement
volunteer programs, matching gift programs, cast contributions, executeve on loan programs
Internal sharing: Community Involvement
shared leave programs, castastrophic leave, disaster relief funds
Culture Change initiatives
Needs strong leadership in the area of culture. sr management support is needed for long term success
Culture change initiatives: Diversity inclusion
providing equal opportunities for all, sponswering diversity awareness fairs, expecting diversity to be respected,
Culture change initiatives: Women's advancement
removing the glass ceiling, create career development opportunities
Culture change initiatives: Mentoring
encouraging succesful employees to mentor less experienced employees
Culture change initiatives: Work redesgin to reduce overload and burnout
creating manageable jobs
Culture change initiatives: team effectiveness strategies
helping employees learn in a team environment
Culture change initiatives: work environment
creating a workplace that attracts and motivates and retains talent
Culture change initiatives: Management flexibility
educating manager for success
Culture change initiatives: older work inititatives
valuing and engagingt older workers on the job
Performance
involves the alignment and subsequent assessment of the orgaziational team and individual efforts towards business goals
recognition
acknowledges or gives special attention to employees actions, efforts and behavior or performance
performance management system
the process is part of this system. It impacts all the organization and the employees
performance management process
ongoing, mutual respect must be the foundation, communication is a two way street, goals and objectives clearly defined.
performance management process phases
1. define goals. 2 provide feedback and coaching, 3 conduct performance dialogue, 4 determine performance recongition, rewards and consequences, conduct annual development and career opportunites
Drivers to total rewards strategy
organizational culture, business strategy, human resources strategy,
organizational culture,
difficult to achieve because it involves changing employee attitudes, and behaviors by altering beliefs, subject to internal and external forces
business stratgey
derived from the mission and vision of an organization. includes corporate mission, vision and strategy
Human Resources Strategy
organizations plan for attraction, motivation and retention of employees. Includes total rewards strategy and the five elements
Design considerations for total rewards
labor market, competition, legal and regulatory climate, technology, cost issues affective the design process, budgeting, support staff needed to administer the programs, globalization
Development
learning experiences designed to enhance employee applied skills and compentencies. Focusing on the current job
Career Opportunities
involves a plan for employees to pursue career goals which may include advancement within the organzation, focused on the next job
Last phase fo the PM process
allows employees to craft plans to future opportunites.
Learning Opportunities
clearing defined, fits into time and resource commitments, interesting, compatible with day to day responsibilities, Can enhance current jobs or accomplish career plan
Types of development and career opportunities,
tuition assistance, corporate universities, technology training, seminar attendance, on the job training,
Coaching and Mentoring opportunities.
leadership and management training, access to experts, exposure to resident experts, mentoring programs,
Advancement opportunities
increase exposure outside the department, publishing articles,succession planning, internal job postings
PM: phase one: define goals.
four types of performance standards: quality, quantity, time and process. Be sure to define measures, methods of ratings and levels of ratings
PM: Phase two: provide ongoing feedback
communcation and monitoring
PM: Phase three: Conduct Performance apprasial and evaluation discussion
include periodic reviews, and year end reviews. MBO - management by objectives
PM: Phase four: determine performance rewards and consequences
think about the relationship between pay programs and reviews, pay for performance, recongition
Recongition programs
ways to reward ee's, meets intrisic needs, supports business strategy, acknowledge contributions immediately.