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Reward June 2010

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  • 1. Compensation & Benefits
    by Fluid
    June 2010
  • 2. Page 2
    Contents
    3-4 Introduction to Fluid
    5-7 Evolution in strategic reward management
    8-16 Flexible benefits
    17-18 Childcare vouchers
    19-20 Corporate incentives
    21-22 Cycle to Work scheme
    23-24 Employee assistance programmes (EAPs)
    25-26 Employee share schemes
    27-28 Private medical insurance
    29-30 Dealing with minimum wage increases
    31-32 Perfect perks
    33-35 Benefits and allowances
    36-38 Negotiating with a motivation & incentives supplier
    39-41 Rescuing motivation schemes that are failing
    42-43 Exercise
    44-48 Pensions
    49-51 Salary reviews and surveys
    52-53 Conclusion and questions
  • 3. Page 3
    Introduction
  • 4. Page 4
    Introduction to Fluid
    Fluid Consulting Limited (Fluid) is a specialist human resources consultancy headed by Tim Holden MCIPD
    10 years in banking
    10 years in Human Resources consultancy
    Fluid trading since 2006
    The core services provided by Fluid are:
    • Retention
    • 5. Selection
    - Attraction
    - Remuneration & Reward
    - Outplacement
    - Training & HR consultancy
  • 6. Page 5
    Evolution in strategic reward management
  • 7. Page 6
    Evolution in strategic reward management 1 of 2
    • FROM business-driven TO aligning reward with business strategy, employee needs and environment
    • 8. FROM isolated initiatives TO integrated and balanced reward management
    • 9. FROM focus on cash TO focus on total reward and engagement
    • 10. FROM mechanistic and inflexible systems TO organic, simpler, variable process
    • 11. FROM pay progression based on individual performance/service TO pay progression based on contribution, skills and knowledge
  • Page 7
    Evolution in strategic reward management 2 of 2
    • FROM planning TO practising
    • 12. FROM design best practice TO process: best fit
    • 13. FROM HR control TO line/employee ownership
    • 14. FROM top-down telling TO communicate and involve
    • 15. FROM ‘big bang’ change TO evolutionary change
    • 16. FROM guess work/faith TO evaluation of initiatives
    • 17. FROM ‘Elastoplast’ technology TO integrated HR and reward information systems
  • Page 8
    Flexible benefits
  • 18. Page 9
    • PREPARATION
    • 19. Existing benefits-policy decisions about what to include and what to exclude
    • 20. Breadth and design of scheme-years one and two and beyond
    • 21. Data-the quality, accessibility and its updating
    • 22. Integration-HR and payroll
    • 23. Administration-should it be internal or external?
    • 24. Discrimination issues-for instance age and sex
    • 25. Harmonisation or savings-never conceal what the scheme might be changing
    • 26. Technology-the fit, integration and capacity
    Flexible benefits 1 of 8
  • 27. Page 10
    • TYPICAL FLEXIBLE BENEFITS
    • 28. Pension
    • 29. Private medical insurance
    • 30. Childcare vouchers
    • 31. Dental insurance
    • 32. Holiday trading
    • 33. Life assurance
    • 34. Share incentive plan
    • 35. Give-as-you-earn charitable donations
    • 36. Health screening
    • 37. Critical illness cover
    Flexible benefits 2 of 8
  • 38. Page 11
    • TYPICAL FLEXIBLE BENEFITS
    • 39. Share save plan/SAYE plan
    • 40. Retail vouchers
    • 41. Discounted services
    • 42. Cycle to Work schemes
    • 43. Optical care/vouchers
    • 44. Gym membership
    • 45. Healthcare cash plan
    • 46. Company car
    • 47. Personal accident insurance
    • 48. Travel insurance
    Flexible benefits 3 of 8
  • 49. Page 12
    • TYPICAL FLEXIBLE BENEFITS
    • 50. Season ticket for travel
    • 51. Mobile phone
    • 52. Cash alternative to company car
    • 53. Personal computer
    • 54. Income protection
    • 55. Financial planning
    • 56. Cash alternative to other benefits
    • 57. Home insurance
    • 58. Concierge benefits
    • 59. Home phone package
    Flexible benefits 4 of 8
  • 60. Page 13
    • A SUCCESSFUL FLEX LAUNCH
    • 61. Build a strong business case to obtain senior buy-in
    • 62. Select an experienced broker to negotiate favourable terms
    • 63. Choose a technology provider with a proven record
    • 64. Don’t be over-ambitious initially-much better to enjoy the successful launch of a core flex package that you can build on in future years than being associated with a failed project
    • 65. Spend as long as it takes cleansing your benefits data
    Flexible benefits 5 of 8
  • 66. Page 14
    • A SUCCESSFUL FLEX LAUNCH
    • 67. Appoint a project team with at least one senior champion
    • 68. Choose a system with built-in rules that prevent uninsured liabilities or additional administration burden
    • 69. Communicate clearly with employees at all stages, including focus groups initially and feedback surveys after launch
    • 70. Remember that flex is flexible-you can add benefits in future years to maintain interest and change any that don’t work
    Flexible benefits 6 of 8
  • 71. Page 15
    • IMPLEMENTING A SCHEME
    • 72. Pick people to do the planning
    • 73. Assess feasibility
    • 74. Get the numbers to add up
    • 75. Build the scheme
    • 76. Look to the law
    • 77. Concentrate on clear communication
    • 78. Integrate-whether system in in-house or outsourced
    Flexible benefits 7 of 8
  • 79. Page 16
    • SCHEMES FOR SMALLER EMPLOYERS
    • 80. Consider the specific needs of the organisation
    • 81. Communicate ease of set up and use to employees
    • 82. Remind the workforce about the new scheme
    Flexible benefits 8 of 8
  • 83. Page 17
    Childcare vouchers
  • 84. Page 18
    Childcare vouchers
    • WHAT TO LOOK FOR?
    • 85. Paper and e-vouchers
    • 86. Online transactions available-Mac and PC compatible?
    • 87. Can vouchers be used for ‘registered’ or ‘approved’ care?
    • 88. Dedicated helpline
    • 89. Services included
    • 90. Standalone or part of flexible benefits online
    • 91. Set-up time
    • 92. Cost based on 100 employees taking their full entitlement of £243 per month
  • Page 19
    Corporate incentives
  • 93. Page 20
    • WHAT TO LOOK FOR?
    • 94. Product range
    • 95. Cost to employer
    • 96. Delivery time
    • 97. How scheme is administered
    • 98. Support given
    • 99. Particular selling points
    Corporate incentives
  • 100. Page 21
    Cycle to Work scheme
  • 101. Page 22
    Cycle to Work scheme
  • 114. Page 23
    Employee assistance progammes
  • 115. Page 24
    Employee assistance programmes
  • 122. Page 25
    Employee share schemes
  • 123. Page 26
    Employee share schemes
  • Page 27
    Private medical insurance
  • 131. Page 28
    Private medical insurance
  • 143. Page 29
    Dealing with minimum wage increases
  • 144. Page 30
    Dealing with minimum wage increases
    • Do your research
    • 145. Revisit your pay structure
    • 146. Consider the costs of staff turnover and training
    • 147. Involve the bean counters
    • 148. Know the law
    • 149. Use alternatives to retain people
    • 150. Consult, test and review
    • 151. Talk to your employees
    • 152. Invest in management
    • 153. Measure the results
  • Page 31
    Perfect perks
  • 154. Page 32
    Perfect perks
    • Once in a lifetime-Ford Motor Co
    • 155. Pampering-Alexander Associates
    • 156. Fun and friendly-NM Rothschild
    • 157. Instant reward-Volvo
    • 158. Prize variety-Carphone Warehouse
    • 159. Cash bonus-KPMG
  • Page 33
    Benefits and allowances
  • 160. Page 34
    • Childcare vouchers
    • 161. Long service awards
    • 162. First aid payments
    • 163. Call-out payments
    • 164. Money-purchase pension schemes
    • 165. Final-salary pension scheme
    • 166. Stakeholder pension scheme
    • 167. Standby allowances
    • 168. Discounts on own organisation’s products or services
    Benefits and allowances 1 of 2
  • 169. Page 35
    • TRAVEL AND SUBSISTENCE
    • 170. Mileage allowance
    • 171. Car allowance
    • 172. Subsistence allowance
    • 173. Free car parking
    • 174. Company car scheme
    • 175. Interest-free season ticket loan
    • 176. Subsidised staff canteen
    • 177. Car leasing scheme
    • 178. Subsidised car parking
    • 179. Interest-free car park loan
    • 180. Interest-free congestion charge loan
    Benefits and allowances 2 of 2
  • 181. Page 36
    Negotiating with a motivation & incentives supplier
  • 182. Page 37
    Negotiating with a motivation & incentives supplier 1 of 2
    • Can you demonstrate an ability to help me solve my business problem?
    • 183. What resources have you got to help me handle my account?
    • 184. How much of the solution you’re proposing is handled in-house and how much is outsourced?
    • 185. What service agreements can you out in place to ensure delivery?
    • 186. What sort of systems do you have in place to make sure that the management information I get from you is accurate, on time and reliable?
  • Page 38
    Negotiating with a motivation & incentives supplier 2 of 2
    • How confident are you that you will still be around in a year’s time?
    • 187. How do you charge for your products and services?
    • 188. What are your commission rates and what is your mark-up on reward media that is brought in-for example vouchers, merchandise, travel and so on?
    • 189. How do you propose we measure the impact of your recommendations?
    • 190. Do you charge for advice upfront?
  • Page 39
    Rescuing motivation schemes that are failing
  • 191. Page 40
    Rescuing motivation schemes that are failing 1 of 2
    • STEP ONE-identify the business objectives behind the initiative, for example: reducing absence, improving productivity or boosting customer service
    • 192. STEP TWO-decide whether the rewards are target based and if so take care to set achievable parameters
    • 193. STEP THREE-before selecting a programme or one-off gift research employees’ desires using tools such as email, the intranet, line manager interaction or focus groups
  • Page 41
    • POTENTIAL PITFALLS
    • 194. The scheme design or reward offered is unsuitable for employees’ age, sex or desires
    • 195. The reward has a gimmicky quality that could be perceived to insult the employees’ professionalism
    • 196. The reward conflicts with the employees’ culture or religion
    • 197. The reward is offered for a target that is beyond the employees’ reach
    • 198. The gift is selected on the assumption that money is the best motivator for everyone
    • 199. The incentive is something that the employee already has
    • 200. The reward is not delivered in the way that it was originally promised
    Rescuing motivation schemes that are failing 2 of 2
  • 201. Page 42
    Exercise
  • 202. Page 43
    Exercise
  • 203. Page 44
    Pensions
  • 204. Page 45
    Pensions 1 of 4
  • 214. Page 46
    Pensions 2 of 4
    • COMMUNICATION
    • 215. Beware giving financial advice
    • 216. Take the initiative
    • 217. Use your providers for additional support
    • 218. Use a variety of media
    • 219. Avoid jargon
  • Page 47
    Pensions 3 of 4
    • COMMUNICATION
    • 220. Engage your people
    • 221. Use plain English
    • 222. Communicate regularly
    • 223. Measure their understanding
    • 224. Use experts if appropriate
  • Page 48
    Pensions 4 of 4
    • KEEPING THE PEACE
    • 225. Inform employees about changes and why they are happening
    • 226. Create a handbook
    • 227. Approach the matter sensitively
    • 228. Look for options to find a balance between defined benefit and defined contributions
  • Page 49
    Salary reviews and surveys
  • 229. Page 50
    Salary reviews and surveys 1 of 2
    • CONDUCT AN ANNUAL REVIEW
    • 230. Work out your budget
    • 231. Review reward principles
    • 232. Analyse market pay data
    • 233. Gain budget approval
    • 234. Communicate the timetable
    • 235. Support line managers
    • 236. Fine-tune the process
    • 237. Explain decisions to employees
    • 238. Inform payroll
  • Page 51
    Salary reviews and surveys 2 of 2
    • GET THE MOST OUT OF SURVEYS
    • 239. Ask who produced the survey
    • 240. Check out the methods of data collection
    • 241. Make sure the sample size is large enough
    • 242. Pay attention to all reward package elements
    • 243. Understand the key statistics
    • 244. Get the right match
    • 245. Decide your market position
    • 246. Use your judgement
  • Page 52
    Conclusion & Questions
  • 247. Page 53
    Conclusion
    Summary
    Questions