1. Describe each of the top (5) advantages of a total rewards approach.
Years ago, society adapted a one size fits all approach when it came to total rewards. Total rewards had been designed to accommodate a wide range of people; it was generic and did not consist of any personalization or flexibility. As the twenty first century emerged, so did the change of the total reward program. This era, known as the “rewards your way” era was filled with a variety of rewards packages to fit the need of different workforces. This type of reward was much needed due to the increase in globalization, which marked an increase in diversity within the labor market. One of the top five advantages of a total rewards approach is Increased Flexibility. A total rewards approach offers tremendous flexibility because it allows awards to be customized to meet the different emotional and motivational needs of employees. Flexibility is a great tool because it allows employees to balance their lifestyle within their work environment. In today’s world, more and more employers are offering more flexible work environments, which allow employees to have a voice in determining when they work, where they work, and how they work.
Improved Recruitment and Retention is another advantage of a total rewards approach. All companies seek success, and the key to success is having the best people on board that will fulfill the company’s vision and strategy. Currently, organizations are facing challenges with recruiting best in class workers. No more are the days where companies used an abundance of money to lure top performers. That method has been proven to not only raise company costs but it is also so overused. A total rewards approach addresses the issues affiliated with recruitment and retention.
It helps create a work experience that meets that needs of employees, and focuses extra attention to spending reward dollars where they will most effective. According to the text, studies show that employees look at the total rewards package when deciding whether to join or stay at an organization. Total rewards have an advantage with recruitment and retention because now companies are able to show their total rewards in a statement format. This enables employees and potential employees to see the entire value of being employed by the company. The cost of turnover is not cheap, and estimates to be anywhere from 30-150% of the yearly salary of the position.
Reduced Labor Costs/ Cost of Turnover are an advantage of a total rewards approach. It helps to save company funds from losses such as customers, sales, and decreased production. Heightened Visibility in a Tight Labor Market is another advantage of a total rewards approach. The labor market has faced some huge shortages, and is expected to get even tighter. Organizations had to realize quick that every employee matters at this point and are no longer interchangeable as they had been in the past. Companies are seeking committed employees at a time where loyalty is at its lowest. Employees and potential employees are seeking environments where they feel their needs are being met. By gaining a clear understanding of the values of employees, mixing and matching rewards, companies can know use total rewards to match what employees say they value most.
The last advantage is Enhanced Profitability. HR professionals have been saddled with escalating benefits costs and changes in health care along with high technology costs. Companies are now struggling to balance their financial targets by cutting programs to trim costs. A total rewards approach allows companies to remix their rewards in a more cost effective way by reallocating dollars rather than finding more dollars.
2. Describe five (5) common ways a total rewards system can go astray.
The first way is trying to re-engineer programs in pieces – When moving to a total rewards approach, never attempt to re-engineer in pieces, do the entire program. All programs must work together to deliver good business results. The second way is trying to implement changes all at once – Although you should re-engineer the entire process at once, you should not implement all the changes at once. This will have a detrimental effect. It’s better to phase in new programs and new rules over time so managers and employees can adapt to the learning curve. The third way is limiting the number of people involved – A large group of people should be involved in a total rewards effort.
All stakeholders should have a place, so that all groups involved can have input. The fourth way is not doing a thorough impact analysis – A thorough analysis of the financial, organizational, employee, and customer impact of the plans should be completed prior to the implementation of any reward program, and the fifth way is not communicating effectively – Proper communication of total rewards is essential to success. Managers should determine the right amount of information to share, the right time to share it, and the right format to use for delivery of this information.
3. Describe the six (6) steps in designing a total rewards program.
The following six processes have been identified to assist with creating a total rewards program. Analyze and Assess¸ Design, Develop, Implement, Communicate, and Evaluate and Revise.
• Analyze and Assess – Get a clear understanding of the existing situation
• Design – Starts with the corporate mission, vision, and business strategy. The HR philosophy flows from this and serves as a guide in the design of all HR programs
• Develop – Have a basic process and adjust it to the organization’s culture, objectives, and specific needs.
• Implement – The action part of the plan.
• Communicate – Educating management and employees on the plan, its objectives, link to the business strategy, its payout, and what each employee can do to affect the performance measures. Effective communication is the key.
• Evaluate and Advise – Find out if its works. Evaluate the program based on its ability to retain and reward top performers, recruit desirable talent, and motivate and satisfy the broader employee population.
4. Describe the eight (8) steps in the communication process.
• Analyze the situation – Identify the specific changes or events in compensation, benefits, and the work experience programs to be communicated.
• Define the objectives – Establish objectives for your communication using the SMART approach (Specific, Measurable, Attainable, Audience-specific, Relevant, and Tied to the business).
• Conduct Audience Research – Tailor your message to meet the needs of your audience.
• Determine Key Message – Link the content of the communication to its objectives.
• Select Communication Channels – Choose various media and convey your message through a continuous theme.
• Develop the Communication Campaign – Document all data in a project plan.
• Implement the Campaign – Release your message, journey through informal networks.
• Evaluate the Campaign – Obtain feedback through surveys, questionnaires, etc.