Reward your people! March 2012
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Reward your people! March 2012

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Half day open training event held in Toronto, Canada.

Half day open training event held in Toronto, Canada.

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Reward your people! March 2012 Presentation Transcript

  • 1. Reward your people! by Toronto Training and HR March 2012
  • 2. 3-4 Introduction to Toronto Training and HR 5-6 DefinitionContents 7-8 9-11 In the beginning Elements of a reward system 12-14 Base of rewards 15-16 Totally rewarding 17-18 Reward equity 19-20 Questions to ask 21-24 A successful reward strategy 25-26 Comparison of employers’ and employees’ views on motivational rewards 27-28 Strategic reward management 29-30 What recognition needs to be 31-38 Points to consider with non-financial reward 39-42 Pay and benefits during an economic downturn 43-44 Reward & recognition on a modest budget 45-46 Primary variables of executive reward 47-48 Typical executive reward frameworks 49-50 Concerns when designing executive rewards 51-52 Expatriates 53-54 Case study 55-56 Conclusion and questions Page 2
  • 3. Introduction Page 3
  • 4. Introduction to Toronto Training and HR• Toronto Training and HR is 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 event design - Training event delivery - Reducing costs - Saving time - Improving employee engagement & morale - Services for job seekers Page 4
  • 5. Definition Page 5
  • 6. DefinitionWhat is reward management? Page 6
  • 7. In the beginning… Page 7
  • 8. In the beginning…Extrinsic and intrinsic rewards Page 8
  • 9. Elements of a reward system Page 9
  • 10. Elements of a reward system 1 of 2Base pay and variable pay (‘pay at risk’)Additional pay like:Individual performance-related payBonusesIncentivesCommission Page 10
  • 11. Elements of a reward system 2 of 2Service-related paySkill-based pay (knowledge-based pay)Competence-related payAllowancesContribution-related pay Page 11
  • 12. Base of rewards Page 12
  • 13. Base of rewards 1 of 2CHOICES UPON WHICH TO BASE PAY ARE:The job basedPerson basedSkill based Page 13
  • 14. Base of rewards 2 of 2PERFORMANCE AND INCENTIVIZATION:Questions to askTypes of incentivesInternal v externalCentralized v decentralized Page 14
  • 15. Totally rewarding Page 15
  • 16. Totally rewardingDefinitionsTangible and intangibleReward elements Page 16
  • 17. Reward equity Page 17
  • 18. Reward equityQuick pollFairness-does it matter?Frequency of employee concernsView of senior managementCriteria impacting reward fairnessDrivers in determining rewardsPerceptions of reward fairness Page 18
  • 19. Questions to ask Page 19
  • 20. Questions to askHow do we set the necessary level of expenditureon employee reward?How can the substance and process of employeereward be used, if at all, to influence employeework attitudes and behaviours? Page 20
  • 21. A successful reward strategy Page 21
  • 22. A successful reward strategy 1 of 3KEY PRINCIPLESRecruit and retain the right peopleInvest in themAgree clear objectivesSet standards and examplesThe paybackLink reward to the organization’s success Page 22
  • 23. A successful reward strategy 2 of 3STRATEGIC ISSUES IN THE DESIGN OF REWARDSYSTEMSBase of rewardsPerformance and incentivization – scope forprogressionMarket positionInternal versus external comparisonDegree of pay hierarchyCentralized versus decentralized reward Page 23
  • 24. A successful reward strategy 3 of 3STRATEGIC ISSUES IN THE DESIGN OF REWARDSYSTEMSReward mixProcess issuesReward systems –consequences/integrationPerformance-related pay Page 24
  • 25. Comparison of employers’and employees’ views on motivational rewards Page 25
  • 26. Comparison of employers’ and employees’ views on motivational rewardsAttractionRetentionMotivation Page 26
  • 27. Strategic reward management Page 27
  • 28. Strategic reward managementCreate a positive and natural reward experienceAlign rewards with business goals to create a ‘win-win’ partnershipExtend people’s line of sightIntegrate rewardsReward individual ongoing value with ‘base pay’Reward results with variable pay Page 28
  • 29. What recognition needs to be Page 29
  • 30. What recognition needs to beVisiblePrevalentMemorablePersonal and spontaneous Page 30
  • 31. Points to consider with non-financial reward Page 31
  • 32. Points to consider with non- financial reward 1 of 7Evolution in employment systems is reported ascreating the conditions under which what isincluded in the effort-reward bargain needs to berethought, especially when managements wish tosecure discretionary effort and a sense ofidentification among employees for whom ‘pay andbenefits’ provide only part of the employer’sconsideration Page 32
  • 33. Points to consider with non- financial reward 2 of 7While flexible benefits may go some way toaddressing workplace diversity issues, ideasgrouped under the logic of ‘total reward’ arepromoted by commentators as building blocks forstill further customization, with the prospect ofachieving a distinctive employment proposition Page 33
  • 34. Points to consider with non- financial reward 3 of 7Definitions of non-financial reward are multi-faceted and often complex, requiring dissection ofthe elements to facilitate detailed cost-benefitanalysis while simultaneously seeking to promoteholistic ‘employment experience’ value greaterthan the sum of the parts Page 34
  • 35. Points to consider with non- financial reward 4 of 7To interpret and evaluate the alternatives andpossible consequences of a total rewardsapproach, it is helpful to apply multidisciplinarytheoretical issues Page 35
  • 36. Points to consider with non- financial reward 5 of 7Research findings suggest that senior managersand total rewards policy designers need to payparticular attention to front-line managers ifexpectations from investment in employeeengagement using total rewards are not to bemisplaced Page 36
  • 37. Points to consider with non- financial reward 6 of 7Unpacking the total reward portfolio may bringtensions to the surface between the rewardelements and their management, which managersneed to reflect on carefully and be clear aboutwhat may be needed to mitigate/compromise onbefore committing to strategic decisions that maybe deemed unsuitable for the organization, itsprincipals and/or workforce members Page 37
  • 38. Points to consider with non- financial reward 7 of 7The ethical and moral dimensions of ideologicalinitiatives intended to secure voluntaryidentification between individual employees andthe organization need to be understood and actedon in framing policy choice and their detailedapplication Page 38
  • 39. Pay and benefits during an economic downturn Page 39
  • 40. Pay and benefits during an economic downturn 1 of 3In bad times, a business strategy must beseen to be fair, so have a two-wayconversation with employees to ensure thepackage appeals to allAs things improve set rewards based onpeople’s impact on the organization Page 40
  • 41. Pay and benefits during an economic downturn 2 of 3Be creative and consider non-financialincentives if money is tight, perhaps linked toimproving work-life balanceKnow when you should reward your bestpeople financially, however tough business isEnsure the rewards drive future skills andperformance so they add value to both theindividual and the organization Page 41
  • 42. Pay and benefits during an economic downturn 3 of 3When trade improves scale-up your benefits torenew the psychological contract you have withyour employeesDon’t ignore the need for effective workforceplanningAnalyze what the downturn told you about whichbenefits your employees really appreciated andwhich do not need to be reintroduced Page 42
  • 43. Reward & recognition on a modest budget Page 43
  • 44. Reward & recognition on a modest budgetAdvancement opportunitiesOfficial letter of appreciationCertificatesPaid time offLunch with the CEOTeam lunch or dinnerPublic photo displayHandwritten notes of thanks Page 44
  • 45. Primary variables of executive reward Page 45
  • 46. Primary variables of executive rewardFixed compensation independent of firmperformance, versus variable reward (tied to aperformance measure)Current compensation accruing at the end of theyear versus deferred compensation accruing inlater years Page 46
  • 47. Typical executive reward frameworks Page 47
  • 48. Typical executive reward frameworksSalaryAnnual performance incentive bonusShare optionsShare awardsPension Page 48
  • 49. Concerns when designing executive rewards Page 49
  • 50. Concerns when designing executive rewardsThe internal environment unique to eachorganizationThe range of stakeholders with an interest in theorganization, its governance and consequencesThe external environment that is likely to comprisefactors outside the control of the organization andits managementDisclosure and transparency Page 50
  • 51. Expatriates Page 51
  • 52. ExpatriatesDefinitionTypical length of assignmentHome-based salary build-up plus foreign servicepremium added to cash supplements for hardshipsCost of living adjustmentHousing allowanceForeign assignment allowance Page 52
  • 53. Case study Page 53
  • 54. Case study Page 54
  • 55. Conclusion and questions Page 55
  • 56. Conclusion and questionsSummaryVideosQuestions Page 56