Reward your employees! April 2011
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Transcript of Reward your employees! April 2011
Reward your employees!
by Toronto Training and HR
April 2011
Contents
3-4 Introduction to Toronto Training and HR5-6 In the beginning7-8 Main benefits issues9-10 Main rewards issues11-12Challenges in respect of reward13-14Doing things the right way15-16Drill A17-20Improving reward-related risk management21-22Reward risk groups23-28Case studies A-C29-31Setting up incentive programs32-33How incentives improve performance34-35Financial education36-37Drill B38-39Praise40-42Recognition43-47Low cost and no-cost rewards48-50Well, instead of a pay rise…51-59Linking engagement with reward60-61Drill C62-63A successful reward strategy64-65Reward in a time of economic uncertainty66-68Total rewards69-72Types of reward problems73-75 Desired reward outcomes76-79Where will employers be investing in the future?
80-83Case studies D-E84-85Conclusion 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 banking• 10 years in training and human resources• Freelance practitioner since 2006• The core services provided by Toronto Training and HR
are:- Training course design- Training course delivery- Reducing costs- Saving time- Improving employee engagement &
morale- Services for job seekers
Page 5
In the beginning…
Page 6
In the beginning…
Extrinsic and intrinsic rewardsObjectivesDirect v indirect reward
Page 7
Main benefits issues
Page 8
Main benefits issuesLack of employee understanding around benefitsLack of joined-up thinking with overall packageEmployees demanding more benefitsEmployees demanding more flexibilityFinal salary pension costsLong-term sickness provision costsUncompetitive benefits packageCompany carsPrivate medical insurance costsGreater focus on green issuesAppropriateness of non-final salary pension schemes
Page 9
Main reward issues
Page 10
Main reward issuesBase salary competitivenessFlexibility of reward to meet the needs of the businessHarmonisation and removing inconsistenciesTotal reward competitivenessFlexibility to meet the needs of employersEffectiveness/competitiveness of performance related payManaging bonus expectationReturn on investmentAdministrationLegislation and tax lawOverseas strategy
Page 11
Challenges in respect of reward
Page 12
Challenges in respect of reward
Attracting/retaining the right talentSupporting organization change (e.g. reorganization, transformation, M&A)Communicating the value of rewards programs to staffGathering relevant market compensation dataKeeping rewards programs affordable and sustainableManaging base pay budgetsIncreasing the effectiveness of incentive plansEnsuring pay-for-performanceDeveloping/implementing a rewards strategy aligned to business directionDifferentiating high performers
Page 13
Doing things the right way
Page 14
Doing things the right way
Get your house in orderAsk employeesEnsure management buy-inSet attainable goalsMake managers accountableBe specific, meaningful and timely
Page 15
Drill A
Page 17
Drill A
Page 17
Improving reward-related risk
management
Page 18
Improving reward-related risk management 1 of 3
Set up effective intelligence gathering systems for reward risk. Use a range of sources to identify the risk that could damage your reward strategy by working with colleagues in finance, legal, compliance and audit functions to gain different perspectives.Regularly review your reward strategy and systems for risk. It’s not a one-off process-ongoing vigilance is required.Don’t reinvent the wheel-use established risk management tools to assess and manage identified reward risks.
Page 19
Improving reward-related risk management 2 of 3
Know your reward risk threshold and manage risk consistent with this. Engage your senior management in this discussion.Build your risk management resilience and develop a permanent risk management culture.
Page 20
Improving reward-related risk management 3 of 3
Risk identification.Risk assessment.Risk mitigation.
Page 21
Reward risk groups
Page 22
Reward risk groupsSEVEN REWARD RISK GROUPSStrategicBehaviouralFinancialOperationalImplementation and change managementLegal and ethicalGovernance
Page 23
Case study A
Page 24
Case study A
Page 25
Case study B
Page 26
Case study B
Page 27
Case study C
Page 28
Case study C
Page 29
Setting up incentive programs
Page 30
Setting up incentive programs 1 of 2
Decide who can participateChoose the right rewardsTailor your communicationFix measurable goalsEnsure goals are achievableTrack and publish progress
Page 31
Setting up incentive programs 2 of 2
Target all relevant employeesCommunicate before the launch and during the incentive for maximum engagement levelsSet goals that are in line with company strategy, are clear, measurable, challenging yet achievableSelect aspirational rewards to suit the participantsEnsure all progress is tracked and published
Page 32
How incentives improve performance
Page 33
How incentives improve performance
When appropriately designed incentives promote greater effort from individualsWhen aligned to the correct performance measures, they help to focus individual effort on an organization’s values and prioritiesDifferential incentives will drive performance as they will attract the right kind of people and put off those not motivated by financial return
Page 34
Financial education
Page 35
Financial education
PensionsDebt managementInsuranceMortgagesInvestment options including shares
Page 36
Drill B
Page 37
Drill B
Page 38
Praise
Page 39
Praise
Personal RelevantAppreciatedInformedSincereExpressed
Page 40
Recognition
Page 41
Recognition 1 of 2Don’t legislate recognition too much. Leave plenty of room for employees to express their true thoughts and emotions.Always include the company value demonstrated or strategic objective contributed to in the recognition message.Write a detailed message of appreciation expressing precisely how the person being recognised contributed and why that contribution was important within the bigger picture.That’s it. Step back and get out of the way.
Page 42
Recognition 2 of 2
CRITICAL ELEMENTS IN A CULTURE OF RECOGNITIONCritical massSimplicityTraining for managers and supervisors
Page 43
Low-cost and no-cost rewards
Page 44
Low-cost and no-cost rewards 1 of 4
Post a thank-you note on the employee's or teammember’s office door.Have your director call an employee or team member to thank him or her for a job well done, or have the same person visit the employee at his or her workplace.Greet employees and colleagues by name when you pass their desks or pass them in the hall.When discussing an employee's or a group's ideas with other people, peers, or higher management, make sure you give credit.
Page 45
Low-cost and no-cost rewards 2 of 4
Acknowledge individual achievements by using people’s names when preparing status reports.Ask five people in your department to go up to theperson sometime during the day and say "{Your name} asked me to thank you for [the task or achievement]. Good job!“Have lunch or coffee with an employee or a group of employees you don't normally see.Make a thank you card by hand.
Page 46
Low-cost and no-cost rewards 3 of 4
Make work Fun! Lunch outings for the entire groupas an everyone-pays-his-own-way event. The value is in the going, so encourage but don't force anyone who isn't comfortable going with the group.Share verbal accolades. Don't forget to forward voice mail messages that compliment a team member’s work.Ask a person to teach or share his accomplishment with others as a way of recognizing the person's ability and role.
Page 47
Low-cost and no-cost rewards 4 of 4
Offer a sincere thank you.Ditch trash and trinkets.Give the gift of time.Foster an environment of inclusiveness.
Page 48
Well, instead of a pay rise…
Page 49
Well, instead of a pay rise…1 of 2
Cash bonus for work on a particular projectGift cardsA couple of days of extra annual leave Technology gift (e.g. iPod Nano, digital camera)Lunch with family or friends paid for by employerBeing ‘fast–tracked’ for promotionLunch or drinks with colleagues paid for by employer
Page 50
Well, instead of a pay rise…2 of 2
Access to internal training coursesTickets to leisure or sporting activities for use with family/friends Option to gain experience in a different department within the organizationOption to gain experience in a similar department in a different organizationA couple of extra days off to do charity/volunteer workA promotion without pay rise
Page 51
Linking engagement with reward
Page 52
Linking engagement with reward 1 of 8
A. Organizations that encourage managers to engage employees by making it a performance criteria and rewarding engagement through incentive programs indicate that their organizations more effectively foster employee engagement/motivation then those organizations that do not. As such, if reward professionals wish to encourage employee engagement, they should :
Page 53
Linking engagement with reward 2 of 8
Develop performance metrics that measure the extent to which supervisors or managers encourage engagement among their subordinates.Reward supervisors and managers for developing employee engagement among their subordinates and peers.Specifically define employee engagement and include it as goal in the strategic plan.
Page 54
Linking engagement with reward 3 of 8
B. When the impact of different categories of rewards programs on engagement was studied, it was discovered that base pay and benefits had the overall weakest relationship with the organization’s ability to foster high levels of employee engagement and motivation compared to incentives, intangiblerewards and quality of leadership on engagement. Quality of leadership had the strongest relationship with effectively engaging and motivating employees. As a result, reward professionals should:
Page 55
Linking engagement with reward 4 of 8
Use pay packages to attract leaders who have demonstrated their ability to engage employees.Think in terms of total rewards and not just financial rewards. Develop employee engagement resources that are directed toward work environment or organization climate, work-life balance and the nature of the job and quality of the work, and career opportunities.
Page 56
Linking engagement with reward 5 of 8
C. Opinion surveys are often associated with efforts to enhance employee engagement and because they are a mechanism for obtaining employee feedback on a variety of work-related issues, including total rewards programs. A recent study indicated that employee surveys were used by 80% of the organizations they represented.
Page 57
Linking engagement with reward 6 of 8
Although more frequent use of employee opinion surveys was associated with effectiveness in fostering high levels of employee engagement and motivation, the relationship was much stronger for organizations where employee opinion survey results generate action and change. As such it is not enough to conduct employee opinion surveys; management must respond to input and suggestions with concrete actions and change. Employees should be involved in those changeefforts.
Page 58
Linking engagement with reward 7 of 8
D. The gold standard in terms of building cooperation and commitment is involvement. A recent study indicated this was true for the design, implementation and assessment of total rewards programs. Although supervisors and managers are involved in the design, implementation and assessment of rewards programs more frequently than employees, their involvement is still relatively infrequent. Thus, involvement in the design, implementation and evaluation of total rewards programs offers a direct way for compensation professionals to enhance employee engagement.
Page 59
Linking engagement with reward 8 of 8
E. In the past research has shown that reward professionals appreciate the importance of pay communication as a means for aligning pay programs with the business strategy and the interest employees have in understanding how they were paid. Employee understanding of compensation strategy, programs and policies — assuming compensation is based on common notions of fairness — provide a foundation for engaging employees.
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Drill C
Page 61
Drill C
Page 62
A successful reward strategy
Page 63
A successful reward strategy
KEY ELEMENTSTo ensure that the demands of each job role are clearly articulated at all times and can be measured.That each individual knows what is expected of them at all times.That each individual knows what they need to do in order to progress to any new role.
Page 64
Reward in a time of economic uncertainty
Page 65
Reward in a time of economic uncertainty
CommunicationCareful cost-cuttingTop performersTotal rewardsSolid reward foundation
Page 66
Total rewards
Page 67
Total rewards 1 of 2
EXTRINSIC AND INTRINSIC MOTIVATIONCompensationBenefitsCareersIntrinsic work factors
Page 68
Total rewards 2 of 2
TANGIBLE TOTAL REWARDSINTANGIBLE TOTAL REWARDSCareer developmentRecognitionCoachingWellbeing and work-life balanceCommunication
Page 69
Types of reward problems
Page 70
Types of reward problems 1 of 2
Failure to produce desired behaviourProduction of desired behaviour and undesirable consequencesProduction of reward dissatisfaction
Page 71
Types of reward problems 2 of 3
UNDERSTANDING BEHAVIOURMembership behaviourTask behaviourOrganizational citizenship behaviour
Page 72
Types of reward problems 3 of 3
REWARD DISSATISFACTIONCauses of reward dissatisfactionConsequences of reward dissatisfaction
Page 73
Desired reward outcomes
Page 74
Desired reward outcomes 1 of 2
Key employee behavioursKey employee attitudes
Page 75
Desired reward outcomes 2 of 2
BEHAVIOURAL IMPLICATIONSDefine the necessary employee behaviourDetermine the necessary employee attributesIdentify salient employee needsEnsure a positive reward valenceMake it clear that performance will lead to rewardsProvide conditions for effort to lead to performance
Page 76
Where will employers be investing in the
future?
Page 77
Where will employers be investing in the future? 1 of 3Training and career developmentNon-cash recognitionWork-life flexibilityAnnual cash incentivesLong-term stock incentivesHealthcare benefitsRetirement benefits
Page 78
Where will employers be investing in the future? 2 of 3OTHER REWARD TOOLSSigning bonusesMore aggressive market adjustments to retain key talentProject milestone bonusesSpot cash awardsReferral incentivesAlternate work arrangementsWorkforce segmentation – reward programs to fit the need
Page 79
Where will employers be investing in the future? 3 of 3WHAT EMPLOYERS CAN DODefine the right tactics for attracting and retaining the employees that are needed to be successful in 2011 Segment the workforce and creatively build reward strategies for engagementCreate a value proposition that helps employees make holistic decisions based upon pay, benefits and careersGo beyond what others are doing - best fit vs. best practices
Page 80
Case study D
Page 81
Case study D
Page 82
Case study E
Page 83
Case study E
Page 84
Conclusion & Questions
Page 85
Conclusion
SummaryQuestions