reward november 2014
DESCRIPTION
Half day open training event on reward in the workplace held in Toronto, CanadaTRANSCRIPT
Reward
by Toronto Training and HR
November 2014
1
CONTENTS3-4 Introduction5-6 Types of financial reward7-9 Types of non-financial reward10-11 Is reward a cost or an investment?12-13 Objectives of reward strategy14-15 Issues with reward practices today16-17 Determining the reward budget18-20 Making changes to the existing reward program21-23 Total rewards optimization 24-26 Value-driver analysis and value trees27-28 Realized and realizable reward29-30 Types of incentive plan31-32 Areas to consider around executive reward33-35 Research around executive reward36-38 Trends around reward strategy39-41 Trends around reward design42-44 Trends around reward implementation45-46 What is likely to happen in 2015?47-48 Risks and priorities for 201549-50 Conclusion, summary and questions
2
Introduction
3
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 banking
15 years in training and human resources
Freelance practitioner since 2006
The core services provided by Toronto Training and HR are:
Training event design
Training event delivery
HR support with an emphasis on reducing costs, saving time plus improving employee engagement and morale
Services for job seekers4
Types of financial reward
5
• Base or fixed pay
• Total earnings
6
Types of financial reward
Types of non-financial reward
7
• Opportunities for personal and career development
• Flexible working (such as working from home or flexitime)
• Being involved in decisions that affect how and when employees do their work
8
Types of non-financial reward1 of 2
• A pleasant working environment
• Good performance management and performance reviews
• Recognition, such as through an ‘employee of the month’ award or team-based events
9
Types of non-financial reward2 of 2
Is reward a cost or an investment?
10
• Minimize it
• Optimize it
11
Is reward a cost or an investment?
Objectives of reward strategy
12
• Externally competitive
• Internally fair
• Is motivational
• Rewards at a reasonable cost
13
Objectives of reward strategy
Issues with reward practices today
14
• Strategy and design
• Implementation
15
Issues with reward practices today
Determining the reward budget
16
• Ability to pay
• Inflation
• Movement in market rates
• The ‘going rate’ of pay awards elsewhere
• Recruitment and retention issues
17
Determining the reward budget
Making changes to the existing reward program
18
• How does the change reflect real business success? Does it reward the right people?
• Does it add value to the business? Is it cost competitive to other organizations?
• Does it fit the talent we need for the future?
19
Making changes to the existing reward program 1 of 2
• Is the organization able to acquire and retain a viable, reliable, and quality workforce?
• Does the communication make sense to a discriminating workforce?
• Is it more responsive to workforce needs?
20
Making changes to the existing reward program 2 of 2
Total rewards optimization
21
• Definition
Questions
• What’s the right overall level of total investment in rewards?
• What’s the best way to allocate that investment across reward elements to maximize the employee behaviour we want to influence?
22
Total rewards optimization 1 of 2
Questions (cont.)
• How do these results vary across targeted employee segments (whether by business unit, age, job level, tenure, skill group, location, performance or other categories)?
23
Total rewards optimization 2 of 2
Value-driver analysis and value trees
24
Value-driver analysis
• Definition
• Interrelationships among various metrics and levers to pull in order to impact results
• People-related costs
25
Value-driver analysis and value trees 1 of 2
Value trees
• Definition
• Deconstructing a high-level driver
• Primary and subordinate drivers
26
Value-driver analysis and value trees 2 of 2
Realized and realizable reward
27
• Realized reward
• Realizable reward
• Issues to consider in developing a realized/realizable pay analysis
28
Realized and realizable reward
Types of incentive plan
29
• At-risk incentive plan
• Add-on incentive plan
30
Types of incentive plan
Areas to consider around executive reward
31
• Determinants (the ‘why’ question)
• Unit of analysis (individual or group)
• Consequences (the ‘why does it matter’ question)
32
Areas to consider around executive reward
Research around executive reward
33
• Are executive compensation and company performance disconnected?
• Did so-called ‘fat cat’ pay caused the worldwide economic crisis of 2008?
• Do Presidents and CEOS manipulate the remuneration committees who set their pay? 34
Research around executive reward 1 of 2
• Has C-suite play taken off because HR was ‘asleep at the wheel’ ?
• Does widening pay dispersion damage employee engagement, satisfaction, performance, fairness, trust or innovation?
35
Research around executive reward 2 of 2
Trends around reward strategy
36
• Externally competitive to motivational
• Inconsistent strategy and design toconsistent strategy and design
• Short-term performance orientation to longer-term performance orientation
37
Trends around reward strategy 1 of 2
• Financial performance measures to balanced performance measures
• Cost orientation of reward to ROI orientation of reward
38
Trends around reward strategy 2 of 2
Trends around reward design
39
• Base pay program management tovariable pay program management
• Paying for jobs and work to focus on paying for value and contribution
• Flexible work arrangements to career development, culture and recognition
40
Trends around reward design 1 of 2
• Defined benefits plans to defined contribution plans
• Siloed reward orientation to total rewards orientation
41
Trends around reward design 2 of 2
Trends around reward implementation
42
• Reward program design to reward program implementation
• Consistent treatment in pay toperformance-based differentiation
• HR-led implementation toline manager-led implementation
43
Trends around reward implementation 1 of 2
• Ad-hoc reward communications tosustained senior leader messaging
44
Trends around reward implementation 2 of 2
What is likely to happen in 2015?
45
• Managing cost base
• Alignment
• Pay for performance
• Total rewards
• Doing more with less
• Communications
• Coaching line managers
• Differentiating rewards
• Non-financial rewards
• Business acumen46
What is likely to happen in 2015?
Risks and priorities for 2015
47
• HR
• Finance
48
Risks and priorities for 2015
Conclusion, summary and questions
49
Conclusion, summary and questions
Conclusion
Summary
Videos
Questions
50