CEO’s and CHRO’s are Increasingly
Concerned about Corporate Culture
• Focus on creating greater
alignment between culture
and company strategy
• 92% agree that organizational
culture significantly affects
financial outcomes, placing
culture at the top of the CEO
and CHRO agendas
2CEB, 2016
What is Culture?
• It’s simple “the way
we do things around
here”
• A set of shared,
subconscious
assumptions and
tacit beliefs
3
Organizational Culture and Total Rewards
• Highly successful companies have
strong unique cultures
• Support employees to achieve
strategic objectives and enhance
organizational performance
• Total rewards systems design how
individuals are rewarded and
communicate an organization’s
beliefs and values
• Key to understanding organizational
culture
4
Total Rewards Model
• Compensation
• Benefits
• Performance management
• Recognition
• Talent Development
• Work-Life Effectiveness
“The behaviors companies reward
and recognize (via financial and
nonfinancial rewards) are the
behaviors more likely to be
demonstrated by employees”
CEB, 2016
Culture has an Impact
Research has shown
the powerful impact on
performance and long-term
effectiveness of
organizations
6
If You Don’t use Culture,
Culture will Use You
• If you’re not aware, it will
shape you
• Human beings Copy,
Coach, and Correct each
other to fit into the group
• So make sure Culture
works for you, instead of
against your necessary
change
7
Survey Questions• The Organizational Culture Assessment Instrument (OCAI)* was used to
identify the dominant culture of your organization based on the Competing Values Framework (CVF)
• Three open-ended questions were examined, organized, and coded into total rewards categories or broad themes
• Question 1: The most important characteristic or attribute that makes my organization's total rewards strategy effective is:
• Question 2: The one or two characteristics or attributes that need to be changed to improve the effectiveness of my organization's total rewards systems are:
• Question 3: Success of the total rewards system at my organization is measured by:
9* OCAI developed by Cameron and Quinn (2006)
Organizational Culture Type Survey Results
10
Culture Type Distribution
Clan 50%
Hierarchy 5%
Market 35%
Adhocracy 10%
Clan Culture – 50%
• People-oriented, friendly
• Leader: facilitator, mentor,
team builder
• Value: commitment,
communicate, develop
• Effectiveness: development
and participation
11Cameron and Quinn, 2006
Total Rewards Major Themes
Clan Culture
• Relationship with management and peers – 25%
• Personal growth and development – 25%
• Performance management – 25%
• Communications - 13%
• Organizational Culture – 6%
• Work that matters – 6%
• Job satisfaction – 6%
• Compensation and benefits – 13%
• Financial security – 13%
12
How success is measured
Clan Culture
• Retention – 25%
• Employee satisfaction – 17%
• Individual development and growth – 17%
• Attraction – 8%
• Employee stress – 8%
• Cost – 8%
• Company performance – 8%
• Not measured – 8%
13
Clan CultureTotal Rewards Considerations
14
Rewards Emphasis
• Respect the organization’s traditions
• Focus on interpersonal and
employee needs
Base Pay
• Competitive or above (caring family)
• Pay reductions rather than layoffs
Bonus
• Team-based
Benefits
• Inclusive and competitive; flexible
Performance and Recognition
• 360 degree feedback
• Competencies and values rather
than numeric ratings
• Group recognition
Development and Career Opportunity
• Individual and team important
Work-Life
• Important to take care of family
Market Culture – 35%
• Results-oriented, competitive
• Individuals are competitive and goal-
oriented
• Leader: hard driver, competitor,
producer
• Value: market share, goal
achievement, profitability
• Aggressively competing and
customer focus
15Cameron and Quinn, 2006
Total Rewards Major Themes
Market Culture
• Compensation and Benefits – 36%
• Link pay and performance – 18%
• Communication – 9%
• Career development – 9%
• Flexibility – 9%
• Job satisfaction – 9%
16
How is Success Measured
Market Culture
• Retention – 40%
• Exit interviews – 20%
• Cost – 20%
• Not measured – 20%
17
Market CultureTotal Rewards Considerations
18
Rewards Emphasis
• External market focus
• Emphasis on individual performance
• Earn rewards based on achieving
agreed-upon goals
Base Pay
• Competitive with market
• Differentiate based on performance
rather than seniority
Bonus
• Individual/company performance
Benefits
• Employees take greater
responsibility
Performance and Recognition
• High performance standards that
differentiate individual performance
• Goals and expectations
• Spot awards and individual
recognition important
Development and Career Opportunity
• Individual development
• Use of “stretch” assignments
Work-Life
• Important for recruiting
• Employee resolves with manager
Adhocracy culture – 10%
• Dynamic, entrepreneurial
• Leader: innovator, visionary,
entrepreneur
• Value: innovation, agility,
transformation
• Innovativeness, vision and
new resources
19Cameron and Quinn, 2006
Total Rewards Major Themes
Adhocracy culture
• Alignment with future business/growth
strategy – 40%
• Work-life balance – 20%
• Respect for employees – 20%
• Pay for performance – 20%
20
Adhocracy CultureTotal Rewards Considerations
22
Rewards Emphasis
• Attract creative individuals who can
take innovation to next level
Base Pay
• Above market based on individual
talent
• Skill-based pay a consideration
Bonus
• Individual/company performance
• Patents/innovation
Benefits
• Flexible and latest innovations
Performance and Recognition
• Support innovation
• System encourages mistakes
• Punishes inactivity
• Recognize and celebrate success
Development and Career Opportunity
• Symposiums and forums
• Tools, technology, and systems to
support individual important
Work-Life
• Flexibility is important
Hierarchy culture – 5%
• Controlled, structured
• Leader: coordinator,
monitor, organizer
• Value: efficiency,
consistency, timeliness,
uniformity
• Control and efficiency and
capable processes
23Cameron and Quinn, 2006
Hierarchy CultureTotal Rewards Considerations
24
Rewards Emphasis
• The reward systems respect the
hierarchy and the need for a
predictable and secure environment
Base Pay
• Competitive
• Well-defined procedures important
Bonus
• Individual/company performance
• Targets support hierarchy
Benefits
• Traditional with focus on long-term
job security to maintain a smooth-
running organization
Performance and Recognition
• Highly structure performance
management systems
• Formal recognition plans with well-
defined criteria
• Service awards
Development and Career Opportunity
• Important for advancement within
the structure
Work-Life
• Not highly valued – slow to adopt
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