lecture 8 - compensation

7/31/2019 Lecture 8 - Compensation

1/18

COMPENSATION

TOTAL REWARDS

SESSION 8:

Lecturer: Shelly-Ann Daniel. MSc., GRP, WLCP

PROFESSIONAL CERTIFICATE IN HUMAN RESOURCE MANAGEMENT


2/18

There are two things that people wantmore than sex and money and that isrecognition and praise.

Mary Kay Ash, Founder of Mary Kay Cosmetics.


3/18

REWARD & RECOGNITION

High-performance companies understand theimportance of offering awards and incentives thatrecognize, validate and value outstanding work.

They keep employees motivated and are effectivemethods of reinforcing company expectations andgoals, especially in times when merit budgets are

low (or even frozen), promotions are rare, healthcare premiums are on the rise and overall jobsatisfaction is low.


4/18

TOTAL REWARDS

Four outputs of an organisations total rewardstrategy:

RECRUITMENT Providing required employees withinbudget

RETENTION Keeping loyal staff who provide bestvalue for money

MOTIVATION Employee commitmentFairness

ImageCONTROL Cost

Maintaining internal relativitiesSupporting organisational changeReducing power of trade unions

Increasing power of line managers


5/18

TOTAL REWARDS STRATEGY

A total rewards strategy determines the level andmix of financial and non-financial rewards

required to attract, retain and encourageindividuals with the skills, abilities andcompetence necessary to deliver performanceoutcomes that support the achievement of

business goals.


6/18

TOTAL REWARDS STRATEGY - Components

GOALS

Clearly defined Link to business objectives

PAY &REWARD

PROGRAMMES

Well-designed Tailored to the needs ofthe organisation

HR &REWARD

PROCESSES

Effective and supportive


7/18

TOTAL REWARDS

Total rewards is the monetary and non-monetaryreturn provided to employees in exchange for their

time, talents, efforts and results. It involves thedeliberate integration of five key elements thateffectively attract, motivate and retain the talentrequired to achieve desired business results.

World at Work


8/18

TOTAL REWARDS World at Work Model

The five key rewards elements are:

Compensation

Benefits

Work-life Performance and Recognition

Development and Career Opportunities

Total rewards strategy is the art of combining these fiveelements into tailored packages designed to achieveoptimal motivation. For a total rewards strategy to besuccessful, employees must perceive monetary and non-

monetary rewards as valuable.


9/18


10/18

TOTAL REWARDS - ElementsCOMPENSATIONPay provided by an employer to an employee for services rendered(i.e., time, effort and skill). Compensation

Base pay nondiscretionary compensation that does not vary according to performance or results achieved. It usuallyis determined by the organization's pay philosophy and

structure - Wages and salariesMerit pay "pay at risk," variable pay changes directly with the level

of performance or results achieved. It is a one-timepayment that must be re-established and re-earned eachperformance period.

Incentives Cash bonuses based on employee performancePromotions Base-pay increases based on potential to perform new

job

Pay increases Base-pay increases based on length of service with theorganisation


11/18

BENEFITS

Programs an employer uses to supplement the cash compensationthat employees receive. These programs are designed to protect theemployee and their family from financial risks

Health and welfare Social and group insurance

Payment for injuries and illness both on and off jobPaid time off These programs are designed to protect the employee's

income flow when not actively engaged at work.o At work (breaks, clean-up time, uniform changing

time)o Away from work (vacation, company holidays,

personal days).

Retirement Payment for work no longer performed based on lengthof employment

TOTAL REWARDS - Elements


12/18

WORK-LIFE

A specific set of organizational practices, policies, programs, plus a philosophy,which actively supports efforts to help employees achieve success at both workand home. They address the key intersections of the worker, their family, thecommunity and the workplace

Workplace flexibility Flexibility in work arrangements

Paid and unpaid time off

Health and well-being

Caring for dependents Assistance to employees to take care of sick parents,children or other dependents time or money

Financial support In times of necessity

Community involvement Participation in and sponsorship of community events

Managementinvolvement/culture changeinterventions.



13/18

PERFORMANCEInvolves the alignment of organizational, team and individual efforttoward the achievement of business goals and organizationalsuccess.

Performance planning is a process whereby expectations are establishedlinking individual with team and organizational

goals. Care is taken to ensure goals at all levels arealigned and there is clear line of sight fromperformance expectations of individual employees allthe way up to organizational objectives and strategiesset at the highest levels of the organization.

Performance The manner of demonstrating a skill or capacity Performance feedback communicates how well people do a job or task

compared to expectations, performance standardsand goals. Performance feedback can motivateemployees to improve performance.



14/18

RECOGNITIONAcknowledges or gives special attention to employee actions,efforts, behaviour or performance. It meets an intrinsicpsychological need for appreciation for one's efforts and cansupport business strategy by reinforcing certain behaviours (e.g.,extraordinary accomplishments) that contribute to organizational

success.The value ofrecognition plans:

oReinforce the value of performance improvementoFoster continued improvement, although it is not

guaranteedoFormalize the process of showing appreciationoProvide positive and immediate feedbackoFoster communication of valued behaviour and

activities.



15/18

DEVELOPMENT

A set of learning experiences designed to enhance employees' applied skillsand competencies; development engages employees to perform better andleaders to advance their organizations' people strategies.

Learning Opportunitieso Tuition assistanceo Corporate universitieso New technology trainingoAttendance at outside seminars,

conferences, virtual education, etc.o Self-development tools and

techniqueso On the job learning; rotational

assignments at a progressivelyhigher level

o Sabbaticals with the express purposeof acquiring specific skills,knowledge or experience.

Coaching/Mentoringo Leadership trainingoAccess to experts/information networks --

association memberships, attendance and/orpresentation at conferences outside of one'sarea of expertise

o Exposure to resident expertso Formal or informal mentoring programs; in

or outside one's own organization.



16/18

CAREER OPPORTUNITIES

A plan for an employee to advance their own career goals and may includeadvancement into a more responsible position in an organization. Theorganization supports career opportunities internally so that talentedemployees are deployed in positions that enable them to deliver their greatest

value to their organization.

Advancement Opportunities

o InternshipsoApprenticeships with expertso Overseas assignmentso Internal job postingso Job advancement/promotiono Career ladders and pathwayso Succession planningo Providing defined and

respectable "on and off ramps"throughout the career life cycle



17/18

AN INTEGRATED TOTAL REWARDS STRATEGY

CultureCulture consists of the collective attitudes and behaviours that influence howindividuals behave.

EnvironmentEnvironment is the total cluster of observable physical, psychological and

behavioural elements in the workplace. Environment sets the tone, as everyonewho enters the workplace reacts to it, either consciously or unconsciously.

AttractionThe ability an organization has to draw the right kind of talent necessary toachieve organizational success. Attraction of an adequate (and perpetual) supplyof qualified talent is essential for the organization's survival, and it is one of thekey planks of business strategy.

RetentionAn organization's ability to keep employees who are valued contributors to

organizational success for as long as is mutually beneficial.


18/18

AN INTEGRATED TOTAL REWARDS STRATEGY

MotivationThe ability to cause employees to behave in a way that achieves thehighest performance levels.

Motivation is comprised of two types:

o Intrinsic Motivation -- Linked to factors that include an employee's

sense of achievement, respect for the whole person, trust, appropriateadvancement opportunities and others, intrinsic motivationconsistently results in higher performance levels.

o Extrinsic Motivation -- Extrinsic motivation is most frequentlyassociated with rewards that are tangible such as pay.

There also are defined levels of intensity with regard to motivation:

Satisfaction -- how much I like things here

Commitment -- how much I want to be here

Engagement -- how much I will actually do to improve business

results.

lecture 8 - compensation

Documents