WorldatWork Total Rewards Management

Business Strategy:

A company's broad plan for competitively positioning its products or services with the intent to accomplish or support the company's mission.

Job Evaluation:

Determines the value of an organization's positions relative to each other - market-based vs. content based job evaluation approaches

Retirement Plans

Government programs, company provided programs, defined benefit plans (DB), defined contribution plans (DC), Hybrid plans

Income Protection Programs:

Health care benefits, welfare benefits, retirement benefits

Base Pay Structure Design Steps:

Job Analysis, Job Documentation, Job Evaluation, Job Worth Heirarchy = Base Pay Structure

Types of Job Documentation:

Job analysis questionnaires, job family matrices, job descriptions

Organizational Culture is

Subject to internal and external influences and greatly influenced by organization's leadership

Performance Management:

The alignment of organizational, team and individudal efforts toward the achievement of business goals and organizational success. It includes establishing expectations, skill demonstration, assessment, feedback and continuous improvement

The Total Rewards Strategy identifies:

The appropriate labor market segments, desired competitive position, the optimal mix of total rewards elements for each employee group, and the way each element will be earned and allocated.

The Business Strategy includes:

The corporate vision, corporate mission, and business strategy

Intrinsic motivation:

Linked to factors that include an employee's sense of achievement, respect for the person, trust and appropriate advancement opportunties. Non-tangible rewards

Compensation:

Pay provided by an employer to an employee for services rendered, this includes both fixed and variable pay tied to performance levels.

Benefits

Programs an employer uses to supplement the cash compensation that employees receive. These health, income protection, savings and retirement programs provide security for employees and their famiies.

Types of Base Pay

Salary, hourly, piece rate

Key Players involved in Total Rewards Strategy development:

Senior management/board of directors, Human resources leadership, Employees, Outside consultants

Recognition Plan Types:

Spot awards, managerial recognition, nominations, organizationwide recogntion

What are the steps of the Business Life Cycle?

Start-up, Growth, Mature, Decline

Base Pay Structure:

Utilized as the framework for pay decisions

Job Documentation:

Written information about job content or functions of the job and the required KSA's (knowledge, skills, and abilities)

Corporate Vision:

a statement about what the organization wants to become. It drives the direction of an organization.

Job Analysis:

a systematic, formal study of duties, provides key information about the nature and level of the work performed

Recognition results-driven programs:

above and beyond performance, peer-to-peer, motivate specfic behaviors

Work-Life Professional:

advocates, conducts analysis, gives input to policy design, mediator/ombudsman

Forms fo recognition:

cash, tangible award, symbolic award, verbal recognition

Talent Development Opportunities should be:

clearly defined, able to fit into time and resource commitments, interesting, compatible with day-to-day responsiblities

Factors influencing Benefits

corporate philosphy/business objectives, competitive practices, taxation, employee demands, costs, demographic changes, perceived value, desire for choices, regulatory/legal environment

Welfare benefits:

death benefits, disablity

HR Practitioner

designs, implements and administers programs

What are the three stages of the pay for performance process?

establish measures, communicate links, assess performance

Quantitative mehtods

examine the importance of jobs in terms of compensable factors (point factor, job component)

Principles of Merit Pay Programs

objective, size, timing, implementation

Merit Increase Guidelines

performance only, performance and position in range

Non-quantitative methods

view the job globally in terms of its importance to the company (ranking, classifcation)

What is the typical pay range spread for the United States?

40% to 50%

What is the United States midpoint differential?

5% to 25%

What percentage of jobs should be benchmarked when sing market pricing to build a base pay structure?

50%

What percentage of job content must be similar for the job match to be considered good?

70%

Corporate Mission:

A precise description of what the organization does, its reason for existence or its purpose for being.

Work-Life Effectiveness:

A specific set of organizational practices, policies and programs plus a philosphy that actively supports efforts to help employees achieve succes both at work and at home

Recognition:

Acknowledges or gives special attention to employee actions, efforts, behavior or performance and supports business strategy by reinforcing certain behaviors that contribute to organizational success. These programs be formal or informal.

Pay for Time Not Worked Programs

At work and not at work

The Total Rewards Approach

Attract, Motivate, Retain, and Engage

Pay for performance systems:

Balanced scorecard, business excellence model, shareholder value added, activity based costing and cost of quality, competitive benchmarking

Components of a Base Pay Structure

Base pay policy, pay grades/bands, Midpoint differential

What are the drivers of the Total Rewards Strategy?

Business Strategy, Human Resources Strategy, Organizational Culture

Work-Life Portfolio:

Caring for dependents, supporting health and wellness, creating workplace flexibility, financial support programs, creative use of paid and unpaid time off, community involvement programs, culture change initiatives

What are the needs for each element of the total rewards strategy satisfies

Compensation - financial Benefits - protection Work-life - intrinsic Recognition - acknowledgement Performance management - employee and organizational alignment Talent development - workplace planning, challenge and growth

Elements of Total Rewards Strategy

Compensation, Benefits, Work-Life Effectiveness, Recognition, Performance Management, Talent Development

Factors Influencing Compensation:

Competitive environment, Collective bargaining/unions, Global growth, Economics, Business Strategy, Life cycle of the organization, Legal compliance

Total rewards strategy:

Considers the drivers (organizational culture, business strategy and HR strategy) and uses them to design the programs for each of the six elements of total rewards.

What are the Total Rewards Model external influences?

Economic, Labor Market, Cultural Norms, and Regulatory

What are the elements of Compensation?

Fixed and variable pay

What are the advantages of the Total Rewards Approach?

High profitably, Lower labor costs, Greater flexibility

Types of Variable pay

Incentives, commissions, bonuses, recognition

Elements of Benefits

Income protection programs and pay for time not worked programs

Types of pay related laws:

Minimum rates of pay, overtime, restrictions on child labor, anticompettive price fixing, pay equity

Extrinsic motivation:

Most frequently associated with rewards that are tangible, such as pay.

External Influence-Cultural Norms

Must have a grasp of the customs, social mores and drivers of the diverse makeup and expectations of the workforce

External Influence-Labor Market

Must understand labor market trends and movements to attract talent at a cost that is affordable and sustainable

What are the career stages?

New to role, emerging, established, expert

Types of content-based job evaluation approach

Non-quantitative and quantitative methods

Talent Development:

Provides opportunity and tools for employees to advance their skills and competencies in both their short and long-term careers. Organizations support career opportunities to effectively deploy talent employees, enabling them to deliver their greatest value to the organization.

External Influence-Regulatory

Regulatory and legal environment can vary widely by country and region, affecting the design and implementation of total rewards Programs should be assessed to ensure they can legally applied at the local level

Variable Pay:

Rewards for accomplishments and results (organizational, group or individual results). Performance-based compensation for pay differentiation, must be flexible and adaptable.

External Influence-Economic

Rising or falling conditions in the global economic landscape

HR strategy:

The organization's overall plan for attraction, motivation, engagement and retention of employees.

Bench marking needs to be done ...

for all positions yearly or at least every other year

Long-Term Incentive Plans

for results achieved between 3 to 5 years (equity-based: company stock used to create an equity interest, nonequity-based: rewards is not-based on stock performance)

Short-Term Incentive Plans

for results achieved in one year or less (profit-sharing, performance-sharing, individual perforamnce-based)

Job Worth Hierarchy:

group jobs relative to other jobs(e.g. bands, pay grades) - final result of the job evaluation process

Factors affecting the success of merit pay:

managerial factors, organizational factors, individual employee factors