7 steps to a reward program
TRANSCRIPT
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7 STEPS TO
DEVELOPINGASTRATEGIC REWARDPROGRAM
Anne Howard
Anne Howard Human Resource Consulting Inc.
Contact Information:
mailto:[email protected]:[email protected] -
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STRATEGY
A careful plan or method for achieving a desired end(Merriam Webster Dictionary)
A long-range policy designed to achieve a specific
purpose (Canadian Oxford Dictionary)
To be strategic is to serve the ends of strategy
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STRATEGIC REWARDS
the art and science offormulating, implementingand evaluating the reward programs that enable
the achievement of organization objectives.
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THE 7 STEPS
1. Know the Business Plan
2. Understand Factors that Affect Strategy
3. Establish Reward Principles4. Establish Required Behavior
5. Establish Reward Mix
6. Establish Evaluation Process7. Establish Communication Plan
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Know the Business Plan
Company Vision, Mission and Long-Term Goals
Key Success Measures
Productivity Profitability (Financial Viability)
Stakeholder Satisfaction
Corporate Citizenship
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Productivity
Formulas:
Gross Organizational
ProductivityGross Revenue
Total Hours Worked
Total Hours Worked:# of Employees X Working
Hours
(100 x 40 hrs /week=208,000/a)
Example:
GOP = $10,000,000
208,000
GOP = $48.08/hr
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Productivity
Formula
Gross Organizational
Productivity
100 People working for1575 hours per year
Example
GOP = $10,000,000
157,500
GOP =$63.49/hr
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Factors That Affect The Reward Strategy
Internal
External
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Internal Factors That AffectThe Reward Strategy
Life Cycle
Size
Structure
Management Style Culture
Products & Services
Employee Knowledge/Skills Constraints
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External Factors That AffectReward Strategy
Volatility/Stability of the Environment
Product/Service Life Cycle & Demand
Customer Needs
Technological Change
Workforce
Complexity/Simplicity of the Environment
Variety of the Product/Service Offerings
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V
O
L
AT I L
I
T
Y
C
O
M
PL E X
I
T
Y
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Establish Reward Principles
Articulate Core Beliefs
Define the Purposes of the Reward Program
Establish Market Position
Establish Reward Process
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Establish Required Behaviors
Task (Motivation)
Membership (Commitment)
Citizenship (Engagement)
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Establish the Reward Mix
Base Pay
Variable Pay
Indirect Pay
Other Rewards
Training, Development & Education
Other Rewards
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Establish the Evaluation Process
Identify The Evaluation Factors
Establish the Evaluation Process & Timing
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Establish The Communication Process
What, When, Where, Why
How
By Whom
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THE 7 STEPS
1. Know the Business Plan
2. Understand Factors that Affect Strategy
3. Establish Reward Principles4. Establish Required Behavior
5. Establish Reward Mix
6. Establish Evaluation Process7. Establish Communication Plan
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Reward Strategy Success
Work collaboratively with other people
Understand the business
Sober Second Look
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Strategic Planning
Formulation
Implementation
Evaluation
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QUESTIONS
?
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References
Canadian Oxford Dictionary
Merriam Webster Dictionary
Compensation Milkovitch Newman
Strategic Pay Edward E. Lawler III
Strategic Compensation in Canada Richard J. Long
Strategic Compensation Joseph J. Martocchio
Strategic Management Fred R. David
The ROI of Human Capital Jac Fitz-enz
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To learn more about Anne Howard
Anne Howard Human Resource Consulting Inc.403-816-3361
To learn more about Payscale
1-888-699-0702
Visit our blog: http://blogs.payscale.com/compensation/
Join our group on LinkedIN: Compensation Today: HR Best Practices
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