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Reward your employees! April 2011
 

Reward your employees! April 2011

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Half day interactive open seminar on reward in Toronto.

Half day interactive open seminar on reward in Toronto.

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    Reward your employees! April 2011 Reward your employees! April 2011 Presentation Transcript

    • Reward your employees!
      by Toronto Training and HR
      April 2011
    • Contents
      3-4 Introduction to Toronto Training and HR
      5-6 In the beginning
      7-8 Main benefits issues
      9-10 Main rewards issues
      11-12 Challenges in respect of reward
      13-14 Doing things the right way
      15-16 Drill A
      17-20 Improving reward-related risk management
      21-22 Reward risk groups
      23-28 Case studies A-C
      29-31 Setting up incentive programs
      32-33 How incentives improve performance
      34-35 Financial education
      36-37 Drill B
      38-39 Praise
      40-42 Recognition
      43-47 Low cost and no-cost rewards
      48-50 Well, instead of a pay rise…
      51-59 Linking engagement with reward
      60-61 Drill C
      62-63 A successful reward strategy
      64-65 Reward in a time of economic uncertainty
      66-68 Total rewards
      69-72 Types of reward problems
      73-75 Desired reward outcomes
      76-79 Where will employers be investing in the future?
      80-83 Case studies D-E
      84-85 Conclusion and questions
    • Page 3
      Introduction
    • Page 4
      Introduction to Toronto Training and HR
      Toronto Training and HRis a specialist training and human resources consultancy headed by Timothy Holden
      10 years in banking
      10 years in training and human resources
      Freelance practitioner since 2006
      The core services provided by Toronto Training and HR are:
      • Training course design
      • Training course delivery
      - Reducing costs
      • Saving time
      • Improving employee engagement & morale
      • Services for job seekers
    • Page 5
      In the beginning…
    • Page 6
      In the beginning…
      Extrinsic and intrinsic rewards
      Objectives
      Direct v indirect reward
    • Page 7
      Main benefits issues
    • Page 8
      Main benefits issues
      Lack of employee understanding around benefits
      Lack of joined-up thinking with overall package
      Employees demanding more benefits
      Employees demanding more flexibility
      Final salary pension costs
      Long-term sickness provision costs
      Uncompetitive benefits package
      Company cars
      Private medical insurance costs
      Greater focus on green issues
      Appropriateness of non-final salary pension schemes
    • Page 9
      Main reward issues
    • Page 10
      Main reward issues
      Base salary competitiveness
      Flexibility of reward to meet the needs of the business
      Harmonisation and removing inconsistencies
      Total reward competitiveness
      Flexibility to meet the needs of employers
      Effectiveness/competitiveness of performance related pay
      Managing bonus expectation
      Return on investment
      Administration
      Legislation and tax law
      Overseas strategy
    • Page 11
      Challenges in respect of reward
    • Page 12
      Challenges in respect of reward
      Attracting/retaining the right talent
      Supporting organization change (e.g. reorganization, transformation, M&A)
      Communicating the value of rewards programs to staff
      Gathering relevant market compensation data
      Keeping rewards programs affordable and sustainable
      Managing base pay budgets
      Increasing the effectiveness of incentive plans
      Ensuring pay-for-performance
      Developing/implementing a rewards strategy aligned to business direction
      Differentiating high performers
    • Page 13
      Doing things the right way
    • Page 14
      Doing things the right way
      Get your house in order
      Ask employees
      Ensure management buy-in
      Set attainable goals
      Make managers accountable
      Be specific, meaningful and timely
    • Page 15
      Drill A
    • Page 17
      Drill A
    • Page 17
      Improving reward-related risk management
    • Page 18
      Improving reward-related risk management 1 of 3
      Set up effective intelligence gathering systems for reward risk. Use a range of sources to identify the risk that could damage your reward strategy by working with colleagues in finance, legal, compliance and audit functions to gain different perspectives.
      Regularly review your reward strategy and systems for risk. It’s not a one-off process-ongoing vigilance is required.
      Don’t reinvent the wheel-use established risk management tools to assess and manage identified reward risks.
    • Page 19
      Improving reward-related risk management 2 of 3
      Know your reward risk threshold and manage risk consistent with this.
      Engage your senior management in this discussion.
      Build your risk management resilience and develop a permanent risk management culture.
    • Page 20
      Improving reward-related risk management 3 of 3
      Risk identification.
      Risk assessment.
      Risk mitigation.
    • Page 21
      Reward risk groups
    • Page 22
      Reward risk groups
      SEVEN REWARD RISK GROUPS
      Strategic
      Behavioural
      Financial
      Operational
      Implementation and change management
      Legal and ethical
      Governance
    • Page 23
      Case study A
    • Page 24
      Case study A
    • Page 25
      Case study B
    • Page 26
      Case study B
    • Page 27
      Case study C
    • Page 28
      Case study C
    • Page 29
      Setting up incentive programs
    • Page 30
      Setting up incentive programs 1 of 2
      Decide who can participate
      Choose the right rewards
      Tailor your communication
      Fix measurable goals
      Ensure goals are achievable
      Track and publish progress
    • Page 31
      Setting up incentive programs 2 of 2
      Target all relevant employees
      Communicate before the launch and during the incentive for maximum engagement levels
      Set goals that are in line with company strategy, are clear, measurable, challenging yet achievable
      Select aspirational rewards to suit the participants
      Ensure all progress is tracked and published
    • Page 32
      How incentives improve performance
    • Page 33
      How incentives improve performance
      When appropriately designed incentives promote greater effort from individuals
      When aligned to the correct performance measures, they help to focus individual effort on an organization’s values and priorities
      Differential incentives will drive performance as they will attract the right kind of people and put off those not motivated by financial return
    • Page 34
      Financial education
    • Page 35
      Financial education
      Pensions
      Debt management
      Insurance
      Mortgages
      Investment options including shares
    • Page 36
      Drill B
    • Page 37
      Drill B
    • Page 38
      Praise
    • Page 39
      Praise
      Personal
      Relevant
      Appreciated
      Informed
      Sincere
      Expressed
    • Page 40
      Recognition
    • Page 41
      Recognition 1 of 2
      Don’t legislate recognition too much. Leave plenty of room for employees to express their true thoughts and emotions.
      Always include the company value demonstrated or strategic objective contributed to in the recognition message.
      Write a detailed message of appreciation expressing precisely how the person being recognised contributed and why that contribution was important within the bigger picture.
      That’s it. Step back and get out of the way.
    • Page 42
      Recognition 2 of 2
      CRITICAL ELEMENTS IN A CULTURE OF RECOGNITION
      Critical mass
      Simplicity
      Training for managers and supervisors
    • Page 43
      Low-cost and no-cost rewards
    • Page 44
      Low-cost and no-cost rewards 1 of 4
      Post a thank-you note on the employee's or team
      member’s office door.
      Have your director call an employee or team member to thank him or her for a job well done, or have the same person visit the employee at his or her workplace.
      Greet employees and colleagues by name when you pass their desks or pass them in the hall.
      When discussing an employee's or a group's ideas with other people, peers, or higher management, make sure you give credit.
    • Page 45
      Low-cost and no-cost rewards 2 of 4
      Acknowledge individual achievements by using people’s names when preparing status reports.
      Ask five people in your department to go up to the
      person sometime during the day and say "{Your name} asked me to thank you for [the task or achievement]. Good job!“
      Have lunch or coffee with an employee or a group of employees you don't normally see.
      Make a thank you card by hand.
    • Page 46
      Low-cost and no-cost rewards 3 of 4
      Make work Fun! Lunch outings for the entire group
      as an everyone-pays-his-own-way event. The value is in the going, so encourage but don't force anyone who isn't comfortable going with the group.
      Share verbal accolades. Don't forget to forward voice mail messages that compliment a team member’s work.
      Ask a person to teach or share his accomplishment with others as a way of recognizing the person's ability and role.
    • Page 47
      Low-cost and no-cost rewards 4 of 4
      Offer a sincere thank you.
      Ditch trash and trinkets.
      Give the gift of time.
      Foster an environment of inclusiveness.
    • Page 48
      Well, instead of a pay rise…
    • Page 49
      Well, instead of a pay rise…1 of 2
      Cash bonus for work on a particular project
      Gift cards
      A couple of days of extra annual leave
      Technology gift (e.g. iPod Nano, digital camera)
      Lunch with family or friends paid for by employer
      Being ‘fast–tracked’ for promotion
      Lunch or drinks with colleagues paid for by employer
    • Page 50
      Well, instead of a pay rise…2 of 2
      Access to internal training courses
      Tickets to leisure or sporting activities for use with family/friends
      Option to gain experience in a different department within the organization
      Option to gain experience in a similar department in a different organization
      A couple of extra days off to do charity/volunteer work
      A promotion without pay rise
    • Page 51
      Linking engagement with reward
    • Page 52
      Linking engagement with reward 1 of 8
      A. Organizations that encourage managers to engage employees by making it a performance criteria and rewarding engagement through incentive programs indicate that their organizations more effectively foster employee engagement/motivation then those organizations that do not. As such, if reward professionals wish to encourage employee engagement, they should :
    • Page 53
      Linking engagement with reward 2 of 8
      Develop performance metrics that measure the extent to which supervisors or managers encourage engagement among their subordinates.
      Reward supervisors and managers for developing employee engagement among their subordinates and peers.
      Specifically define employee engagement and include it as goal in the strategic plan.
    • Page 54
      Linking engagement with reward 3 of 8
      B. When the impact of different categories of rewards programs on engagement was studied, it was discovered that base pay and benefits had the overall weakest relationship with the organization’s ability to foster high levels of employee engagement and motivation compared to incentives, intangible
      rewards and quality of leadership on engagement. Quality of leadership had the strongest relationship with effectively engaging and motivating employees. As a result, reward professionals should:
    • Page 55
      Linking engagement with reward 4 of 8
      Use pay packages to attract leaders who have demonstrated their ability to engage employees.
      Think in terms of total rewards and not just financial rewards.
      Develop employee engagement resources that are directed toward work environment or organization climate, work-life balance and the nature of the job and quality of the work, and career opportunities.
    • Page 56
      Linking engagement with reward 5 of 8
      C. Opinion surveys are often associated with efforts to enhance employee engagement and because they are a mechanism for obtaining employee feedback on a variety of work-related issues, including total rewards programs. A recent study indicated that employee surveys were used by 80% of the organizations they represented.
    • Page 57
      Linking engagement with reward 6 of 8
      Although more frequent use of employee opinion surveys was associated with effectiveness in fostering high levels of employee engagement and motivation, the relationship was much stronger for organizations where employee opinion survey results generate action and change. As such it is not enough to conduct employee opinion surveys; management must respond to input and suggestions with concrete actions and change. Employees should be involved in those change
      efforts.
    • Page 58
      Linking engagement with reward 7 of 8
      D. The gold standard in terms of building cooperation and commitment is involvement. A recent study indicated this was true for the design, implementation and assessment of total rewards programs. Although supervisors and managers are involved in the design, implementation and assessment of rewards programs more frequently than employees, their involvement is still relatively infrequent. Thus, involvement in the design, implementation and evaluation of total rewards programs offers a direct way for compensation professionals to enhance employee engagement.
    • Page 59
      Linking engagement with reward 8 of 8
      E. In the past research has shown that reward professionals appreciate the importance of pay communication as a means for aligning pay programs with the business strategy and the interest employees have in understanding how they were paid. Employee understanding of compensation strategy, programs and policies — assuming compensation is based on common notions of fairness — provide a foundation for engaging employees.
    • Page 60
      Drill C
    • Page 61
      Drill C
    • Page 62
      A successful reward strategy
    • Page 63
      A successful reward strategy
      KEY ELEMENTS
      To ensure that the demands of each job role are clearly articulated at all times and can be measured.
      That each individual knows what is expected of them at all times.
      That each individual knows what they need to do in order to progress to any new role.
    • Page 64
      Reward in a time of economic uncertainty
    • Page 65
      Reward in a time of economic uncertainty
      Communication
      Careful cost-cutting
      Top performers
      Total rewards
      Solid reward foundation
    • Page 66
      Total rewards
    • Page 67
      Total rewards 1 of 2
      EXTRINSIC AND INTRINSIC MOTIVATION
      Compensation
      Benefits
      Careers
      Intrinsic work factors
    • Page 68
      Total rewards 2 of 2
      TANGIBLE TOTAL REWARDS
      INTANGIBLE TOTAL REWARDS
      Career development
      Recognition
      Coaching
      Wellbeing and work-life balance
      Communication
    • Page 69
      Types of reward problems
    • Page 70
      Types of reward problems 1 of 2
      Failure to produce desired behaviour
      Production of desired behaviour and undesirable consequences
      Production of reward dissatisfaction
    • Page 71
      Types of reward problems 2 of 3
      UNDERSTANDING BEHAVIOUR
      Membership behaviour
      Task behaviour
      Organizational citizenship behaviour
    • Page 72
      Types of reward problems 3 of 3
      REWARD DISSATISFACTION
      Causes of reward dissatisfaction
      Consequences of reward dissatisfaction
    • Page 73
      Desired reward outcomes
    • Page 74
      Desired reward outcomes 1 of 2
      Key employee behaviours
      Key employee attitudes
    • Page 75
      Desired reward outcomes 2 of 2
      BEHAVIOURAL IMPLICATIONS
      Define the necessary employee behaviour
      Determine the necessary employee attributes
      Identify salient employee needs
      Ensure a positive reward valence
      Make it clear that performance will lead to rewards
      Provide conditions for effort to lead to performance
    • Page 76
      Where will employers be investing in the future?
    • Page 77
      Where will employers be investing in the future? 1 of 3
      Training and career development
      Non-cash recognition
      Work-life flexibility
      Annual cash incentives
      Long-term stock incentives
      Healthcare benefits
      Retirement benefits
    • Page 78
      Where will employers be investing in the future? 2 of 3
      OTHER REWARD TOOLS
      Signing bonuses
      More aggressive market adjustments to retain key talent
      Project milestone bonuses
      Spot cash awards
      Referral incentives
      Alternate work arrangements
      Workforce segmentation – reward programs to fit the need
    • Page 79
      Where will employers be investing in the future? 3 of 3
      WHAT EMPLOYERS CAN DO
      Define the right tactics for attracting and retaining the employees that are needed to be successful in 2011
      Segment the workforce and creatively build reward strategies for engagement
      Create a value proposition that helps employees make holistic decisions based upon pay, benefits and careers
      Go beyond what others are doing - best fit vs. best practices
    • Page 80
      Case study D
    • Page 81
      Case study D
    • Page 82
      Case study E
    • Page 83
      Case study E
    • Page 84
      Conclusion & Questions
    • Page 85
      Conclusion
      Summary
      Questions