Total Rewards Strategies:

Getting the Most from Your

Rewards Dollars

June 2018

Dan Ripberger

Managing Directordan.ripberger@rscadvisorygroup.com

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About the Webinar

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What do employers need of employees?

Employers don’t hire people because they like them.

− THEY HIRE PEOPLE TO MAKE THEM MONEY OR ACHIEVE THEIR MISSION!

You can spend too much on employees . . .

Investment

Hours Worked/Production

Labor Supply Curve

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What do employers need of employees?

Demonstrated proficiency in specific competencies

− Core behavioral and personal traits

− Job-related and technical competencies

Engagement

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So, we want engaged employees . . .

Gallup defines engaged employees as those who are involved in, enthusiastic

about and committed to their work and workplace.

In other words, they are mentally present and aware to perform their jobs, they

are engaged in the moment.

Engagement is a percent of time measure.

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SIDE BAR: Managers drive employee engagement . . .

HR helps managers drive engagement.

HR helps drive manager engagement.

It’s a small world – managers and employees don’t see it all.

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SIDE BAR: In theory, managers are not people too. . .

Management is a set of duties and responsibilities like any other job –

managers are tools of the organization.

Managers first priority is management – even if beer is involved.

Totally effective management is difficult and exhausting (probably).

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Step-Wise Strategy Formulation

Organization

Strategy

People

Strategy

Employment

Brand

Total

Rewards

Strategy

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Employment Branding

Process of creating, communicating and socializing an organization’s value

proposition to current and potential employees.

Brand image elements may include:

−Organization/product image

− Culture

−Management style/effectiveness

− Caliber of current employees

− Career and development opportunities

− Benefits and work/life balance options

− Security/stability

− Altruism

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Poll Question #1

Which comes first, your people strategy or your employment brand?

❑People Strategy

❑Employment Brand

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Total Rewards Model

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Mass Customization

No more herd – each employee has their own needs

−One size does not fit all

− Impractical/impossible to individualize all rewards

Total Rewards allows organizations an approach for “mass customization”

−Mass production of goods with differing individual specifications through the

use of components that may be assembled in a number of different

configurations.

−Mass customization is a cost-efficient way of offering some of the benefits of

customization.

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What is a Total Rewards Strategy?

An approach for managing the elements of the employment interface between

the organization and its workforce

It provides a vehicle for:

− Identifying value-added employment-related factors

− Prioritizing the organization’s human resource investment

− Rationalizing different components of the employment interface

− Communicating the alignment between rewards and business strategy

It addresses opportunities to forge a shared destiny with employees:

− To attract, retain & engage

− To protect, enable, and reward

Is the fundamental strategy for delivery upon your employment value

proposition

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Poll Question #2

Of the list below, what is the main reason employees leave?

❑Their boss

❑Boring work

❑Career advancement opportunities

❑Salary and/or variable pay

❑Flexibility

Example Tools/Levers

Complication

Other

Identification

Co-workers

External Advancement

Internal Advancement

Positive Culture

Effective Management

Employee Services

Paid Time Off

EngageRetainRecruit

Effective Tendency

Retirement

Health & Welfare

Long-term Incentive

Cash Incentive

Base Salary

CostTool Complication

Other

Identification

Co-workers

External Advancement

Internal Advancement

Positive Culture

Effective Management

Employee Services

Paid Time Off

EngageRetainRecruit

Effective Tendency

Retirement

Health & Welfare

Long-term Incentive

Cash Incentive

Base Salary

CostTool

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Selecting Levers Based on Value

0.0

1.0

2.0

3.0

4.0

5.0

Variable

Pay

Health

Insurance

Day Care Paid Time

Off

On-Site

Services

Group

Auto

Importance Effectiveness Cost

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Additional Design Considerations

Environment & Culture

Leadership & direction

Management style

Work processes

Organizational structure

Communications

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Poll Question #3

True or false. The relative importance (and plan design focus/vendor selection)

of your health insurance program’s employee cost, benefit levels, administrative

features, employee education programs and other characteristics should be

determined in the context of your total rewards strategy.

❑True

❑False

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Additional Design Considerations

Economic Environment

Industry status

Organization life cycle

Financial constraints

Competitive practices

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Communicate, communicate, communicate

Organizational basis/need

Value proposition of employment

Purpose of total rewards strategy

−Objectives of each element

− Current and future

Organizational expectations of employees

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Integrate, measure . . . adjust

Align and integrate

− Selection systems

−Onboarding programs

− Talent identification and management

− Career development (Or counseling?)

Measure

−Market/candidate perceptions and expectations

− Employee perceptions, expectations and disconnects

− Programmatic impact

− Business/organization performance

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Critical Areas of Effectiveness

Identifying most likely to succeed

Managing overall investment

Better aligning rewards with employee needs

Creating a programmatic framework to communicate

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Poll Question #4

What programs or items could be considered reward elements?

❑Health benefits

❑Educational assistance

❑Expensive laptop

❑HRIS

❑All of the above

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We judge our organizations’intentions while

employees judge ourorganizations’ actions

Parting Thoughts

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The way you pay people is yourmost sincere form of

organizational communication . . .

Is your money where your mouth is?

Parting Thoughts

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About RSC Advisory Group

RSC is a full-service management consulting and services firm that

provides clients compensation consulting solutions.

We are comprised of senior advisors and technical specialists with

diverse perspectives, experiences and technical abilities.

Our tailored consulting teams are a key component of our value

proposition. We bring resources that are best-suited to each client’s

specific needs.

We advise on, design and help implement systems and practices that

help clients grow and utilize people resources effectively.

Visit our website at www.rscadvisorygroup.com