Test programs to ensure they're delivering results such as employee performance, motivation and loyalty
The start of a new year inspires many to make plans for improvement. If one of your resolutions for 2006 is to enhance the value of total rewards, review best practices to help get you on your way.
After considering what to include in your definition of total rewards — base pay, benefits, recognition and incentive pay, as well as non-monetary aspects such as training, communications, performance management and the overall work environment — and what your goals are, you’ll want to survey staff, brand the program and set benchmarks.
Survey employees
While alignment between an organization’s business strategy and what it offers employees is important, the value of such an approach is only realized if the desired employee performance and behaviours are achieved.
Therefore it’s not only important to have a strategic vantage point when designing total rewards programs, but it’s also critical to test whether these programs are delivering results. A best practice approach involves conducting employee research or other diagnostics to assess whether the current employment deal is having a positive impact on employee performance, motivation and loyalty.
An employee survey or other research tool can help answer such questions as:
•What elements of total rewards are most important to employees? Least important?
•To what extent do employees understand the value of the various elements of their employment deal?
•How engaged are employees in contributing to the success of the business? What factors support employee engagement? What’s getting in the way?
•To what extent do employees regard the organization as a good place to work?
•To what extent do they see themselves as having a future with the organization?
Brand the program
The quality of communications of total rewards is as important as the quality of the program itself. Some organizations make significant investments in total rewards but fail to get the expected returns because employees don’t fully understand, or appreciate, what is being offered.
A growing number of organizations are approaching employee communications with the same thoughtfulness and rigour used to develop marketing strategies for communicating with customers. So just as organizations seek to build powerful brands and a strong market reputation for their products and services, so too are they seeking to compete on a compelling brand as an employer.
On the road to building more powerful and inspiring employee communications, organizations need to address:
•What do people value most about working for the organization? What are its selling points?
•What distinguishes the organization from competing employers?
•To what extent do employees consider the organization to be an employer of choice?
Rethink the approach to benchmarking
While understanding how well total rewards programs are aligned and delivered internally is critical, it is also important to understand how they measure up in the competitive marketplace.
Organizations have long been conducting market studies on the competitiveness of pay practices, but the evolution of the total rewards perspective has also prompted some to revisit how they benchmark themselves against other companies. A best practice approach to benchmarking involves reconsidering not just the types of companies used as comparators, but the types of data collected as well. Effective benchmarking approaches address the following questions:
•What types of companies make appropriate comparators?
•What types of market data can be of value?
While many companies have historically focused on their own industry, some are now taking a more expansive view and considering other competitors for talent. Rather than just looking at other financial service organizations, an insurance company might include other types of leading service providers.
Further, while obtaining market data on the levels of pay in the market for specific jobs is a common exercise, the appetite for other types of data is growing to include:
•the value of employer- and employee-paid benefits and other total rewards elements;
•the aggregate value of an organization’s total rewards offering (covering as many elements as possible) versus aggregate market values;
•design features of pay programs, such as the types of measures used in incentive plans;
•the level of investment in different types of programs, such as dollars per employee spent on training and development; and
•the prevalence of different types of total reward elements.
In recent years, many organizations have made significant strides in developing total rewards strategies and in designing and implementing integrated programs. The wisdom offered by the dawning of a new year, however, suggests there is always value in looking for ways to make good things even better.
Claudine Kapel is a principal with Kapel and Associates Inc., an HR and communications consulting firm. She can be reached at (416) 422-1636. Liz Wright is the Toronto practice leader of Watson Wyatt’s Human Capital Group. She can be reached at (416) 943-6050.
What are the goals?
Questions to ask about total rewards
While having a clear picture of the array of total rewards programs in the organization is important, a more pivotal question is whether or not these programs are delivering optimal value, both individually and in combination.
The most effective approaches to designing and delivering total rewards consider what the organization is trying to achieve and what it needs to offer to attract, retain and engage the employees it needs to thrive. This includes addressing some fundamental questions including:
•What are the organization’s key strategic objectives?
•How are employees expected to contribute to these objectives?
•How should employees be rewarded for contributions?
•How effective is the current total rewards package in driving high performance and recognizing results?
•How effective is the current total rewards package in balancing employer and employee needs?
•Have the needs of customers, shareholders and other stakeholders been reflected in the design and delivery of current programs?
•Are there any risks or liabilities inherent in current programs that need to be revisited or mitigated?
An effective total rewards offering enables an organization to attract, retain and motivate employees so business objectives can be achieved without losing sight of the need for financial accountability and good corporate governance.
After considering what to include in your definition of total rewards — base pay, benefits, recognition and incentive pay, as well as non-monetary aspects such as training, communications, performance management and the overall work environment — and what your goals are, you’ll want to survey staff, brand the program and set benchmarks.
Survey employees
While alignment between an organization’s business strategy and what it offers employees is important, the value of such an approach is only realized if the desired employee performance and behaviours are achieved.
Therefore it’s not only important to have a strategic vantage point when designing total rewards programs, but it’s also critical to test whether these programs are delivering results. A best practice approach involves conducting employee research or other diagnostics to assess whether the current employment deal is having a positive impact on employee performance, motivation and loyalty.
An employee survey or other research tool can help answer such questions as:
•What elements of total rewards are most important to employees? Least important?
•To what extent do employees understand the value of the various elements of their employment deal?
•How engaged are employees in contributing to the success of the business? What factors support employee engagement? What’s getting in the way?
•To what extent do employees regard the organization as a good place to work?
•To what extent do they see themselves as having a future with the organization?
Brand the program
The quality of communications of total rewards is as important as the quality of the program itself. Some organizations make significant investments in total rewards but fail to get the expected returns because employees don’t fully understand, or appreciate, what is being offered.
A growing number of organizations are approaching employee communications with the same thoughtfulness and rigour used to develop marketing strategies for communicating with customers. So just as organizations seek to build powerful brands and a strong market reputation for their products and services, so too are they seeking to compete on a compelling brand as an employer.
On the road to building more powerful and inspiring employee communications, organizations need to address:
•What do people value most about working for the organization? What are its selling points?
•What distinguishes the organization from competing employers?
•To what extent do employees consider the organization to be an employer of choice?
Rethink the approach to benchmarking
While understanding how well total rewards programs are aligned and delivered internally is critical, it is also important to understand how they measure up in the competitive marketplace.
Organizations have long been conducting market studies on the competitiveness of pay practices, but the evolution of the total rewards perspective has also prompted some to revisit how they benchmark themselves against other companies. A best practice approach to benchmarking involves reconsidering not just the types of companies used as comparators, but the types of data collected as well. Effective benchmarking approaches address the following questions:
•What types of companies make appropriate comparators?
•What types of market data can be of value?
While many companies have historically focused on their own industry, some are now taking a more expansive view and considering other competitors for talent. Rather than just looking at other financial service organizations, an insurance company might include other types of leading service providers.
Further, while obtaining market data on the levels of pay in the market for specific jobs is a common exercise, the appetite for other types of data is growing to include:
•the value of employer- and employee-paid benefits and other total rewards elements;
•the aggregate value of an organization’s total rewards offering (covering as many elements as possible) versus aggregate market values;
•design features of pay programs, such as the types of measures used in incentive plans;
•the level of investment in different types of programs, such as dollars per employee spent on training and development; and
•the prevalence of different types of total reward elements.
In recent years, many organizations have made significant strides in developing total rewards strategies and in designing and implementing integrated programs. The wisdom offered by the dawning of a new year, however, suggests there is always value in looking for ways to make good things even better.
Claudine Kapel is a principal with Kapel and Associates Inc., an HR and communications consulting firm. She can be reached at (416) 422-1636. Liz Wright is the Toronto practice leader of Watson Wyatt’s Human Capital Group. She can be reached at (416) 943-6050.
What are the goals?
Questions to ask about total rewards
While having a clear picture of the array of total rewards programs in the organization is important, a more pivotal question is whether or not these programs are delivering optimal value, both individually and in combination.
The most effective approaches to designing and delivering total rewards consider what the organization is trying to achieve and what it needs to offer to attract, retain and engage the employees it needs to thrive. This includes addressing some fundamental questions including:
•What are the organization’s key strategic objectives?
•How are employees expected to contribute to these objectives?
•How should employees be rewarded for contributions?
•How effective is the current total rewards package in driving high performance and recognizing results?
•How effective is the current total rewards package in balancing employer and employee needs?
•Have the needs of customers, shareholders and other stakeholders been reflected in the design and delivery of current programs?
•Are there any risks or liabilities inherent in current programs that need to be revisited or mitigated?
An effective total rewards offering enables an organization to attract, retain and motivate employees so business objectives can be achieved without losing sight of the need for financial accountability and good corporate governance.
