salary and compensation management- presentation-final
TRANSCRIPT
Reward Reward StrategiesStrategies
ByBy
saima aftabsaima aftab
RewardsRewardsSaying ‘thank you’ for a job well Saying ‘thank you’ for a job well done, and thereby motivating the done, and thereby motivating the recipient to continue to do those recipient to continue to do those things that benefit the things that benefit the organizationorganization
RewardRewardss
ExtrinsicExtrinsic IntrinsiIntrinsicc
•ResponsibilityResponsibility•Interesting workInteresting work•Personal growthPersonal growth•Diversity of Diversity of activitiesactivities
FinancialFinancial
Non-Non-FinancialFinancial
1: EXTRINSIC FINANCIAL 1: EXTRINSIC FINANCIAL REWARDSREWARDS
• Wages• Bonuses• Profit-sharing• Vacations• Sick leave• Purchase discounts
2. EXTRINSIC NON-2. EXTRINSIC NON-FINANCIAL REWARDSFINANCIAL REWARDS
• Office furnishings• Lunch hours• Parking spaces• Work assignments,
locations• Business cards• Secretary• Titles
REWARD STRATEGY
LAWLER’S MODEL OF REWARD LAWLER’S MODEL OF REWARD STRATEGYSTRATEGY
RESOURCES
ENVIRONMENT
CORPORATE GOALS & OBJECTIVES
ORGANIZATION DESIGN &MANAGEMENT STYLE
REWARD SYSTEM
INDIVIDUAL & ORGANIZATIONAL BEHAVIUOR
Reward system – An important means of Reward system – An important means of communicationcommunication
RELATIONSHIP BETWEEN HR & REWARD RELATIONSHIP BETWEEN HR & REWARD PRACTICES & BUSINESS PERFORMANCEPRACTICES & BUSINESS PERFORMANCE
JOBJOB SATISFACTIONSATISFACTION
EMPLOYEE EMPLOYEE INVOLVEMENT / INVOLVEMENT /
COMMUNICATIONCOMMUNICATION
BUSINESS BUSINESS PERFORMANCEPERFORMANCE
HR PRACTICESHR PRACTICES
DYNAMIC REWARD DYNAMIC REWARD STRATEGIESSTRATEGIES
DYNAMIC REWARD STRATEGIES
RESPONSIBLE, DYNAMIC AND FLEXIBLE HR PROFESSIONALS
ALIGNING REWARD SYSTEM WITH STRATEGY
BUSINESS STRATEGY
PEOPLE REQUIREMENT
PREVIOUS REWARD METHODS
CHANGES TO
REWARDS
EFFECTIVE REWARD STRATEGYEFFECTIVE REWARD STRATEGY
EFFECTIVE EFFECTIVE REWARD REWARD
STRATEGYSTRATEGY
WELL DEFINED GOALS &
OBJECTIVES
WELL DESIGNED PAY & REWARD PROGRAMMES
ACCORDING TO THE NEEDS
EFFECTIVE & SUPPORTIVE
HR
BALANCED, PRACTICAL REWARD BALANCED, PRACTICAL REWARD STRATEGY MODELSTRATEGY MODEL
ORGANIZATIOORGANIZATION N CAPABILITIESCAPABILITIES
BUSINESS BUSINESS STRATEGYSTRATEGY
ORGANIZATIOORGANIZATION STRUCTUREN STRUCTURE
EMPLOYMENT EMPLOYMENT DEALDEAL
COMPETENCIESCOMPETENCIES
DEMOGRAPHICSDEMOGRAPHICS
VALUESVALUESTOTAL REWARD TOTAL REWARD STRATEGYSTRATEGYPAYPAY BENEFITBENEFIT
SSLEARNING & LEARNING & DEVELOPMENTDEVELOPMENT
WORK WORK ENVIRONMENTENVIRONMENT
IMPOROVED BUSINESS RESULTS & ALIGNED EMPLOYEE IMPOROVED BUSINESS RESULTS & ALIGNED EMPLOYEE BEHAVIOURSBEHAVIOURS
EMPLOYER’S EMPLOYER’S PERSPECTIVEPERSPECTIVE
EMPLOYEE’S EMPLOYEE’S PERSPECTIVEPERSPECTIVE
CONFLICTSCONFLICTS
• Focus on individual performance in teams
• Lack of customer service rewards• Lack of relationship between pay &
performance• Absence of learning and
development• Pay levels and benefits entitlement
strongly related to the length of service
• Lack of variable portion in pay
PERFORMANCE RELATED PAYPERFORMANCE RELATED PAY
• Score card driven Score card driven bonusbonus
– Customer satisfaction (customer survey)
– Shareholder returns (profitability vs. targets)
– Process excellence– Learn ‘n’ Grow
Reward Policies
Reward Policies
Reward Policies provide guidelines for the implementation of reward strategies and the design and management of reward
process.
Considerations
• The level of reward• The relative importance attached to
market rates and equity• Attraction and retention• The relationship of rewards to business
performance• Total reward policy
Considerations
• The scope for the use of contingent rewards related to performance, competence, contribution or skills.
• Assimilation policies• The degree of flexibility required.• The role of line managers.• Involve employees in the design of reward
systems• Communicate the reward policies to employees• Transparency.
Level of Reward
• Organizations philosophy about Rewards:– High payer, Average , Below Average
• Policy depends on a number of factors:– Level of performance– Competition for good quality people– Tradition stance & organizational culture of
the company– Affordability
Market Rate and Equity
• Policy needs to be formulated on the extent to which rewards are market driven rather than equitable.– Obtain and keep high quality staff– Response to market pressures
• Market considerations will derive levels of pay in the organization.
Attraction policies
• Career prospects• Training and development• Intrinsic interest of the work• Flexible working arrangements• Work life balance
Retention policies
• Capelli says “market determines the movement of employees, not the company”
• Talent management (attraction and retention of quality employees)
• Talent management policies– To attract employees– To develop employees– Retain employees– Motivate employees
Talent Management Policies
• Talent Management Process:– Employer of Choice– Recruitment procedures– Designing jobs and roles– Opportunities to develop skills– Working environment
Talent Management process
– Work life balance– Leadership qualities of line managers– Recognition– Conducting talent audits
Reward to Business Performance
• Link between reward and business performance.
• Gain sharing– A commitment to employee involvement that ties
additional pay to improvements in workforce performance.
• Profit sharing – A plan under which an employer pays to eligible
employees, as an addition to their normal remuneration, additional sums in the form of cash or shares in the company related to the profits of the business.
Total Rewards
The total reward policy should state that although contingent rewards play an important part in the reward policies of the organization other forms of non financial reward are regarded as being equally important
Contingent Rewards
Pay for individual that is related to performance, competence, contribution or service.
Assimilation Policies
• How existing employees should be assimilated into revised pay structure.
– Red circling (identifying and dealing with overpaid people)
– Green circling (identifying and dealing with underpaid people)
Flexibility
• Flexing Company Cars– Trading up– Trading down– Trading outFlexible HolidaysFlexible PensionsFlexible private medical Insurance
Role of line Managers
• Direct interaction with employees• Trained
Involving Employees
• Employees should be given voice in the design and management of reward processes.
Communication to Employees
• Reward processes are powerful media for conveying messages to employees about the organizations values and the contribution they are expected to make in upholding those values and achieving the organization’s goals.
Transparency
• Reward process should not be secret activity.– Pay progression – Lack of understanding breeds suspicion.
THANKS