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TOTAL REWARDS - Coggle Diagram

- - - - Benefit: Tangible payments or services provided to broad groups of employees to cover issues such as retirement, health care, sick pay/disability schemes, life insurance, and paid time off. Internal and external training and development that employees receive is also considered a benefit.
      - Compensation: Refers to all other financial returns (beyond any tangible benefits payments or services), including salary and allowances.
      - Perquisites: Compensation provided on an individual basis in the form of goods or services. Examples of perquisites include automobiles and mobile devices.
      - Incentives or premiums: Payments in return for the achievement of specific, time-limited, targeted objectives. Often they are calculated as a percentage of base salary. Payment may be made in a lump sum or as ongoing payments over a specified period of time.
    - - should be reviewed periodically and modified based on how well it is working and current factors affecting the business.
      - SHRM tells us that an effective compensation philosophy passes the following quality test:
        *1. Is the overall program equitable?
        
        Is the overall program defensible and perceived by employees as fair?
        
        Is the overall program fiscally sensitive?
        
        Is the compensation philosophy legally compliant?
        
        Can the organization effectively communicate the philosophy to employees and prospective candidates?
        
        Are the programs the organization offers fair, competitive, and in line with the compensation philosophy and policies?*
        
        <!> Communication, transparency, and consistency
    - - Senior management buy-in is critical for success
      - Process - 4 steps:
        
        Assessment:
        
        evaluate the current compensation and benefits systems and the effectiveness of those systems in helping the organization reach its goals
        
        Results: the assessment report
        
        An assessment report should include plausible solutions to questions such as:
        
        Who should be eligible for the rewards?
        
        What kinds of behaviors or values are to be rewarded (within the organization’s reward and recognition system)?
        
        What type of total rewards will work best?
        
        How will the organization fund the new system?
        
        Design
        
        a senior management team made up of HR and department representatives identifies and analyzes various reward strategies to determine what would apply best in their workplace
        
        Decisions are made about what will be rewarded and what rewards will be offered to employees for those achievements
        
        Implementation
        
        HR department implements the new rewards system and circulates materials that communicate the new strategy to employees.
        
        Implementation efforts need to support the long-term needs of the organization to ensure a sustainable business model
        
        Evaluation
        
        Is the system strategy in compliance?
        
        Is the system strategy compatible with the organization’s mission and strategy?
        
        Does the system strategy fit the culture? Is it appropriate for the workforce?
        
        Is the system strategy internally equitable?
        
        Is the system strategy externally competitive?
    - - Strategic Alignment
        In the end, the total rewards plan should attract the right people to the right jobs at the right time and place. It should also be at the right cost and should provide appropriate performance incentives to produce engaged employees who are loyal to the organization and drive organizational success.
      - Cultural Alignment
        
        Organizations typically take one of two basic approaches toward employees:
        1. Entitlement-oriented:
        In general, as benefits increase, there is less emphasis on individual employee contributions and responsibility and more emphasis on the success of the organization as a whole.
        2. Contribution-oriented:
        these compensation systems emphasize performance-based pay, incentives, and shared responsibility for benefits
        
        the trend is moving away from the entitlement approach toward the performance approach - HYBRID
      - Alignment with Workforce Preferences
      - Equity
      - Pay Strategies
        
        Lag market competition
        
        Match market competition
        
        Lead market competition
        
        Lead-lag market competition
        
        The correct strategy depends on:
        
        How the employees add value to the organization’s success.
        
        How competitive the market is for talent (supply versus demand).
        
        The degree to which the organization can afford to pay for a particular strategy.
        
        Where the organization wants to place itself as an employer of choice.
      - The use of remuneration surveys is critical in assessing external equity. Organizations need to ensure that the key responsibilities and goals of the roles being compared are similar and that the industry, sector, and other organizational characteristics are comparable.
      - Global Remuneration Issues and Challenges
        
        Alignment with Global Staffing
        
        Influencing Factors in a Global Environment
        
        Standardization versus Localization
        
        Culture
        
        Competitive Labor Market
        
        Collective Bargaining, Employee Representation, and Government Mandates
        
        Economic Factors
        
        Taxation
    - - Reason:
        
        Educating employees about the organization’s total rewards practices.
        
        Achieving employees’ buy-in and making them aware of the overall value.
        
        Supporting the organization’s strategic objectives
        
        Supporting the organization’s goals for performance management.
      - What Needs to Be Communicated
      - Total Rewards Communication Tools