Holt Renfrew goes after the unique; B.C. Lottery focuses on work environment

Two total reward programs bring out two different emphases

Having a total rewards program begins with knowing exactly whom to hire and retain. At Holt Renfrew, a high-end retailer headquartered in Toronto with 2,200 employees, vice-president of human resources Mark Derbyshire knows he’s not trying to appeal to all and sundry. He’s got a very specific idea of what the ideal Holt Renfrew employee looks like, and that vision serves as a reference point for the company in putting together the right total compensation package.

The way Derbyshire describes them, Holt Renfrew employees are sophisticated, fashion-conscious people who love the customer, get bored with the same-old and don’t mind having things shaken up once in a while. They’re receptive when asked to change the way they do their work every once in a while. And, conversely, they look for some “sizzle” — something different in what they’re offered by their employer.

“If you only come to the table and say, ‘Here’s our base,’ that might get them but that won’t keep them. There’s always someone else willing to offer a few cents or a dollar an hour more than you,” said Derbyshire. “I think what keeps them is the flexibility and the choice and that thing that’s so unique that no one else can duplicate.”

Employees are given a 50-per-cent discount on all store items and a 33-per-cent discount on most sales items.

“For people who love fashion, that’s the thing that someone in another industry can’t duplicate,” he said.

When employees refer someone new to the company, their cash award isn’t much — $100 — but what they also get is an entry in a yearly draw. The winner gets a customized vacation of their choice.

“We’ve sent a woman and her husband to New York for three days, had them picked up at the airport in a town car, put champagne and strawberries in their room,” said Stephany Babson, manager, employee marketing. Perhaps that’s why participation in the referral program grew from six in 2004 to 127 last year, she said.

For service awards, the company doesn’t dole out items “branded as Holt, but branded as luxury,” said Derbyshire. Employees who’ve reached a milestone —five, 10, 15, 20, 25 or 30 years with the company — can go online and choose a Links of London luxury item such as a pair of cuff links, a bracelet or a pin. They also get a budget with which to celebrate the event, “so they can celebrate with their team members or have a private dinner with their spouse or a friend or whatever. We leave it up to them,” said Babson.

Giving employees a taste of luxury is also a favourite theme for Derbyshire and Babson. For the Star program, where employee accomplishments are celebrated twice a year at each of Holt Renfrew’s 14 sites, awards take the form of Tiffany key rings. Once a year, for the SuperStar program, about 70 top performers are flown to Toronto for a gala dinner at the historic Carlu with the president, the board of directors and members of the executive committee. They get the star treatment: red carpet, valet parking, professional casting photographs that go up on the wall, a luxury gift basket and a delectable dinner.

“It’s a real gala event, something that we might do for our customers,” said Derbyshire. That’s important because unlike most retail environments, where employees can typically afford to be customers, at Holt Renfrew, there can be a “sharp contrast” between being a customer and an employee, said Derbyshire.

“We try to blend out those extreme differences,” he said.

The retailer’s total rewards program emphasizes choice. When it comes to staples such as benefits, employees get to choose between a traditional family medical and dental plan or a health spending account that employees could use for anything from botox treatments to teeth whitening. The pension offered is a defined contribution plan that gives employees the ability to choose where to invest.

And when it comes to training and development, employees are given the option to undergo a 360-degree feedback process to better understand themselves.

“They choose whom they want to ask and the results are 100 per cent confidential. They’re not allowed to share the results with anyone, not even with their boss. It’s meant to be a development tool for them,” said Derbyshire.

B.C. Lottery Corporation’s two-pronged approach

At the British Columbia Lottery Corporation, which employs 650 people throughout the province, the total rewards program is focused on building both a supportive, encouraging environment and on sustaining a high-performance culture through learning and development.

Lisa Gurak, manager of total rewards, said just prior to her joining in 2004, the crown corporation had set out to become more competitive. Although the corporation is the only body authorized to run lotteries and gambling houses in the province, it has a mandate to bring in more revenue to the province in the next few years. Plus, with the growth of gambling on the Internet, not even a crown corporation can comfortably claim a monopoly on gambling dollars.

“We wanted to become a flexible, adaptable organization, one that’s collaborative, that has an open and honest communication, and that supports innovations,” said Gurak.

As the corporation reviewed and retooled its total rewards program, one of the first components Gurak looked at was introducing a pay for performance compensation structure. Because it’s a public-sector employer, the corporation pegs its base salary at the 50th percentile. But it also introduced merit and variable pay at all levels

The learning and development component is also emphasized in the new total reward program. It’s one budget that has never been cut, said Gurak. Given the technological know-how that supports much of the business, “if our staff aren’t continually up to date, that doesn’t help,” she added.

The corporation covers membership in professional associations, helps finance outside learning, sends people to seminars and conferences and offers a range of in-house courses, particularly those on leadership development. Also, to help employees envision a career path in the organization, it implemented a role profiling system that sets out job descriptions and skills required at all levels last fall.

Just as important a component, however, is the corporation’s recognition program. In an employee survey in 2004, employees identified recognition as an area that needed improvement. To foster a recognition culture, the corporation decided that formal programs would represent no more than 20 per cent of the program. The bulk of recognition should come from managers, through the day-to-day words of praise and thanks.

“You can’t expect formal recognition to provide a change in culture. It has to come through the relationship with people,” said Gurak. Thus, HR’s role in promoting this program is to raise awareness among, and offer tips for, managers.

“It’s about helping our leadership understand that you can’t treat everyone the same. You really have to connect with your staff to understand their motivation.”

In terms of tools, Gurak said she gave each department a whiteboard and a stack of cards. The IT department, in particular, really ran with it and filled up the whiteboard with notes of thanks, messages of congratulations to people who’ve recently married and updates on projects. One manager started a “travelling” recognition book — so named because it’s meant to be filled in and passed along to the next person thanked instead of sitting on someone’s desk. It was so popular, a second book had to be started up.

The objective of such programs “is to create a positive environment, where people feel good and appreciated and valued,” said Gurak. That sense of congeniality is so infectious, said Gurak, that in recent years, people have even taken it upon themselves to send along positive feedback to the HR department.

“In HR departments, you tend to hear only the negative. But since I’ve been here, I definitely have seen a shift.”

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