reward june 2013
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Topical reward issues for the second half of 2013
by Toronto Training and HR
June 2013
Page 2
CONTENTS5-6 Definitions
7-8 Philosophy of reward management
9-11 Total reward 12-13 Conducting a compensation impact analysis
14-15 The model of effort-reward imbalance
16-17 Drill A18-21 Why have a reward strategy?22-26 Developing a reward strategy27-28 Drill B29-30 Job evaluation31-36 Recognition37-38 Applying a reward and recognition program39-40 The four Ps of reward41-48 Trends in 201349-50 Conclusion and questions
Page 3
Introduction
Page 4
Introduction to Toronto Training and HR
Toronto Training and HR is a specialist training and human resources consultancy headed by Timothy Holden 10 years in banking10 years in training and human resourcesFreelance practitioner since 2006The core services provided by Toronto Training and HR are:
Training event designTraining event deliveryReducing costs, saving time plus improving employee engagement and moraleServices for job seekers
Page 5
Definitions
Page 6
Definitions• Intrinsic rewards• Types of intrinsic rewards• Extrinsic rewards• Types of extrinsic reward• Reward management• Recognition
Page 7
Philosophy of reward management
Page 8
Philosophy of reward management
• Strategic sense• Total reward• Differential reward
according to the contribution
• Fairness, equity, consistency and transparency
Page 9
Total reward
Page 10
Total reward 1 of 2
• Definition• Pay• Benefits• Learning & development• Work environment• Armstrong & Brown model
Page 11
Total reward 2 of 2
Total reward
Page 12
Conducting a compensation impact
analysis
Page 13
Conducting a compensation impact analysis
• Determine the objectives• Identify the market• Gather tools• Share findings up and
down
Page 14
The model of effort-reward imbalance
Page 15
The model of effort-reward imbalance
• Transmitter systems• Imbalance is maintained
under certain conditions• The imbalance between
high effort and low reward increases the risk of reduced health
• Overcommitted people are at increased risk of reduced health
Page 16
Drill A
Page 17
Drill A
Page 18
Why have a reward strategy?
Page 19
Why have a reward strategy? 1 of 3 • Can play a central role in
shaping reward policies and practices when aligned to the organization’s culture, values and objectives
• Communicate and reinforce what the organization wants to and wants not to reward
• Drive change on pay, benefits and wider reward so that it is aligned
Page 20
Why have a reward strategy? 2 of 3
WHY DO THEY NOT DELIVER?• Focus on best practice• Focus on design at expense of
shareholders and implementation
• Focus on ‘what’ outcomes can drive unwanted behaviours
• Changes not aligned to the organization’s culture and values
• No clear means of measuring or evaluating success
Page 21
Why have a reward strategy? 3 of 3
WHY DO THEY NOT DELIVER?• Skills and abilities of line
managers in implementation• Perceived as a HR initiative
and not driven by top leadership
• Insufficient two-way communications
• Attitudes of employees, line managers and the top team
Page 22
Developing a reward strategy
Page 23
Developing a reward strategy 1 of 4• Organizational strategy
• HR strategy
• Reward strategy
Page 24
Developing a reward strategy 2 of 4
• STRUCTURE AND CONTENT OF A REWARD STRATEGY
• Environmental analysis; macro and micro
• Gap analysis• A broad-brush approach • Specific initiatives
Page 25
Developing a reward strategy 3 of 4
• MAJOR STRATEGIC REWARD DECISIONS
• What to pay employees• How to pay individual
employees• What benefits to offer• How to construct recognition
programs
Page 26
Developing a reward strategy 4 of 4
• Phase One-diagnosis and specification
• Phase Two-design and stakeholder input
• Phase Three-test and validate in preparing for implementation
• Phase Four-implement, communicate and evaluate
Page 27
Drill B
Page 28
Drill B
Page 29
Job evaluation
Page 30
Job evaluation
• A systematic process• Relative or absolute• Analytical or non-analytical• Market pricing
Page 31
Recognition
Page 32
Recognition 1 of 5
• Types of recognition• Why does it matter today?• Sustaining a culture of
recognition• The business case• Anticipated benefits• Program effectiveness• Measurable impact
Page 33
Recognition 2 of 5
PROGRAMS• Adoption• Type• Standardization• Age• Delivery• Design and reality• Activities
Page 34
Recognition 3 of 5
PROGRAMS (CONTINUED)• Ensure the program
delivers value to its employees
• Resolve the tension between manageability and measurability
• Evolve recognition so that it becomes a part of the culture
Recognition 4 of 5RECENT RESEARCH• It’s there but not enough
people know about it• HR fails to effectively
enable recognition• Highly effective programs
result in lower turnover• Many employees state they
are recognized annually or not at all
• Whilst many employees crave recognition specificity and ease these are not priorities for HR
Page 36
Recognition 5 of 5RECENT RESEARCH (CONTINUED)• Senior leaders are not as
important to recognition as HR thinks
• Programs help create a recognition culture
• Failure to customize external programs or integrate software comes at a price
• Programs need to be refreshed frequently
Page 37
Applying a reward and recognition program
Page 38
Applying a reward and recognition program
• Create an award program for peer recognition of a job well done or for going above and beyond in their work
• Produce a monthly or quarterly newsletter
• Plan an annual firm-wide retreat
• Host employee outings• Recognize your employee’s
family including children and pets
Page 39
The four Ps of reward
Page 40
The four Ps of reward
• Pay• Praise• Promotion• Punishment
Page 7
Trends in 2013
Trends in 2013 1 of 7NON TRADITIONAL REWARD PROGRAMS• Faster ramp-up cycles in
keeping events relevant• Use of hybrid and virtual
formats• Decision making pushed up
the change of command• “Above and beyond”
behaviours• Acknowledge performers
who are adaptable, collaborative and innovative
Page 43
Trends in 2013 2 of 7BUDGETARY PESSIMISM• Global economic difficulties• “Discount fever”• Changes in vacation
choices• Cutting back on gifts but
increased usage of gift cards
• Are gift cards right for your organization?
Page 44
Trends in 2013 3 of 7TECHNOLOGY• Faster broadband speeds• Cost-effective apps• Mobile access• Tablet applications• Social media
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Trends in 2013 4 of 7GAMIFICATION• Incentives• Virtual currencies• Learning & development
Page 46
Trends in 2013 5 of 7NON-CASH REWARDS• Meaningful and challenging
work• Trustworthy and
transparent performance management process
• Praise• Recognition
Page 47
Trends in 2013 6 of 7WELLNESS• Exercise• Sleep• Diet• Alcohol and tobacco• Mental health
Page 48
Trends in 2013 7 of 7CSR• Ethics and morals• Sustainability• “Green”• Climate change and carbon
footprint
Page 49
Conclusion and questions
Page 50
Conclusion and questions
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