TransAlta Corporation keeps pay, performance the focus of total rewards

Work culture, flex hours sit outside reward structure
By Todd Humber
|Canadian HR Reporter|Last Updated: 05/20/2004

T

otal rewards is a loosely defined term that can mean different things to different companies. There’s no one right solution to solving the total rewards puzzle. Stacking any two programs up against each other will inevitably show a myriad of philosophies, strategies and opinions — policies that work at one firm could lead to disaster at another organization.

TransAlta Corporation, a power-generation firm with 2,500 employees based in Calgary, is taking a different approach than RBC Financial Group (see related articles link below for what RBC is doing), setting its sights firmly on tying performance and rewards together as part of its total rewards strategy.

Marc Lattoni, total rewards director for TransAlta, said things like flexible working hours and a good culture — while important and valued — don’t really fit into the total rewards equation.

“There’s a bunch of stuff that goes on that we provide employees from the point of view of engagement and facilitating work-life, but we don’t consider them rewards,” said Lattoni. “Those are part of the package of the work environment and the work culture as opposed to a reward.”

If an employee wants flexible hours, they get them. Ditto if they want to take a sabbatical.

“Everyone gets that,” he said. “Everyone is eligible whether you perform highly or poorly but the value of your pensions, for example, is a function of your base pay and your base pay is a function of your competency. So there’s a reward linkage.”

He said he understands where firms that do include what he calls the “small r” rewards in total rewards programs are coming from, but TransAlta doesn’t include them in the mix.

As part of its total rewards strategy, it is implementing a new performance management program and linking it to a wide range of rewards, including base pay, medium-term incentive compensation (for meeting a three-year target) and long-term incentives such as stock options and a performance share plan. The basic philosophy is that superior performance will be met with superior pay.

On the non-financial side, Lattoni said they’ve identified career opportunities and training and development as target areas and are focusing on that in 2004.

TransAlta has also launched a recognition program it calls “Above and Beyond” for staff who do just that. Rewards vary from something as simple as a letter of commendation from the CEO to thousands of dollars in cash.

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