Total reward; what's it all about? March 2011

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Half day interactive open workshop in Toronto for organizations interested in the improvement or implementation of total rewards.

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Total reward; what's it all about? March 2011

  1. 1. Total reward; what’s it all about?<br />by Toronto Training and HR <br />March 2011<br />
  2. 2. Contents<br /> 3-4 Introduction to Toronto Training and HR<br /> 5-8 Definitions<br /> 9-10 Possible outcomes<br /> 11-12 Critical success factors<br />13-14 Typical content & examples<br /> 15-16 Drill A<br /> 17-18 Components of total reward strategy<br />19-24 Implementing total reward strategies<br /> 25-26 Drivers of engagement in Canada<br />27-28 Avoiding pitfalls<br /> 29-30 Benefits communication<br />31-32 Recognition and reward appetites<br />33-35 Designing a recognition plan<br />36-37 Drill B<br />38-43 The future of total reward<br />44 -46 Dos and Don’ts<br />47-48 Case study A<br />49-50 Case study B<br />51-52 Conclusion and questions<br />Page 2<br />
  3. 3. Page 3<br />Introduction<br />
  4. 4. Page 4<br />Introduction to Toronto Training and HR<br />Toronto Training and HRis a specialist training and human resources consultancy headed by Timothy Holden <br />10 years in banking<br />10 years in training and human resources<br />Freelance practitioner since 2006<br />The core services provided by Toronto Training and HR are:<br /><ul><li>Training course design
  5. 5. Training course delivery</li></ul>- Reducing costs<br /><ul><li>Saving time
  6. 6. Improving employee engagement & morale
  7. 7. Services for job seekers</li></li></ul><li>Page 5<br />Definitions<br />
  8. 8. Page 6<br />Definitions 1 of 3<br />Compensation<br />Benefits<br />Personal growth<br />
  9. 9. Page 7<br />Definitions 2 of 3<br />TOTAL REWARDS STRATEGY<br />Mission/values/philosophy<br />Reward plan value drivers<br />
  10. 10. Page 8<br />Definitions 3 of 3<br />TOTAL REWARD STATEMENTS<br />Why do organizations issue them?<br />In what situations?<br />
  11. 11. Page 9<br />Possible outcomes<br />
  12. 12. Page 10<br />Possible outcomes<br />Global total reward statements<br />Benefits<br />Wider communications strategy<br />Examples of ROI<br />Typical implementation process<br />
  13. 13. Page 11<br />Critical success factors<br />
  14. 14. Page 12<br />Critical success factors<br />Data quality<br />Valuation methodologies<br />
  15. 15. Page 13<br />Typical content & examples<br />
  16. 16. Page 14<br />Typical content & examples<br />Covering letter<br />Personal details<br />Summary charts and/or tables<br />Fuller breakdown and description of benefits<br />Other non-tangible benefits<br />Voluntary benefits<br />
  17. 17. Page 15<br />Drill A<br />
  18. 18. Page 16<br />Drill A <br />
  19. 19. Page 17<br />Components of total reward strategy<br />
  20. 20. Page 18<br />Components of total reward strategy<br />Base salary<br />Short-term incentives<br />Medium-term incentives<br />Long-term incentives<br />Wealth accumulation<br />Executive benefits<br />Executive perks <br />
  21. 21. Page 19<br />Implementing total rewards strategies<br />
  22. 22. Page 20<br />Implementing total rewards strategies 1 of 5<br />AT THE BEGINNING<br />Naming the project leader<br />Selecting additional members<br />Clarifying team members’ roles<br />
  23. 23. Page 21<br />Implementing total rewards strategies 2 of 5<br />ASSESSMENT<br />Conducting focus groups<br />Using industry benchmark surveys<br />Examining current policies<br />Surveying employee attitudes towards reward<br />Reviewing the literature<br />Writing the assessment report<br />
  24. 24. Page 22<br />Implementing total rewards strategies 3 of 5<br />DESIGN<br />Compensation<br />Costs of secrecy<br />Benefits of secrecy<br />Satisfying employees with pay<br />Benefits<br />Personal and professional development<br />Work environment<br />Synergies through total rewards design<br />
  25. 25. Page 23<br />Implementing total rewards strategies 4 of 5<br />EXECUTION<br />Eligibility<br />Top management support<br />Measurement<br />Project management<br />Checklist <br />
  26. 26. Page 24<br />Implementing total rewards strategies 5 of 5<br />EVALUATIONMeasuring the outcomes<br />Outcomes and data sources<br />Interpreting the findings<br />Checklist <br />
  27. 27. Page 25<br />Drivers of engagement in Canada<br />
  28. 28. Page 26<br />Drivers of engagement in Canada<br />Senior management interest in employee well-being<br />Challenging work<br />Overall work environment<br />Input in decision-making<br />Career advancement opportunities<br />Resources to get the job done<br />Senior management ensuring long-term success<br />Reputation of the company<br />Teamwork<br />Manager helps me understand contribution to firm’s financial success<br />
  29. 29. Page 27<br />Avoiding pitfalls<br />
  30. 30. Page 28<br />Avoiding pitfalls<br />The profitless profit-sharing plan<br />The missing appraisal system<br />The no-go goal sharing plan<br />
  31. 31. Page 29<br />Benefits communication<br />
  32. 32. Page 30<br />Benefits communication<br />Highlight the facts so it is clear that the contents of the communication are only a summary<br />Indicate which documents govern the plan and that they will prevail in the event of any inconsistency<br />Ensure the communication is not contrary to the plan and is an accurate summary of the information presented<br />Limit communications to only that information which is necessary to allow them to make a decision for themselves<br />While not required, it is prudent to state that the<br />terms of the communication are not intended to form a contractual relationship<br />
  33. 33. Page 31<br />Recognition and reward appetites<br />
  34. 34. Page 32<br />Recognition and reward appetites<br />Traditionalists 61+<br />Boomers 45-60<br />Generation X 25-44<br />Generation Y 14-25<br />
  35. 35. Page 33<br />Designing a recognition plan<br />
  36. 36. Page 34<br />Designing a recognition plan 1 of 2<br />Establish program objectives, measurements and a budget<br />Select the best recognition alternatives—formal/informal, immediate/long-term, public/<br />non-public, individual/team<br />Determine legal requirements and tax liability<br />Integrate recognition into the total rewards program<br />Prepare the action plan<br />
  37. 37. Page 35<br />Designing a recognition plan 2 of 2<br />Educate managers and train plan leaders<br />Communicate heavily throughout implementation and regularly thereafter<br />Consistently evaluate effectiveness through employee surveys and other feedback mechanisms<br />
  38. 38. Page 36<br />Drill B<br />
  39. 39. Page 37<br />Drill B <br />
  40. 40. Page 38<br />The future of total reward<br />
  41. 41. Page 39<br />The future of total reward 1 of 5<br />Base salary<br />Short-term incentives<br />Medium-term incentives<br />Long-term incentives<br />Wealth accumulation<br />Executive benefits<br />Executive perks <br />
  42. 42. Page 40<br />The future of total reward 2 of 5<br />Technology will foster innovation and play a larger role in business & work processes. Markets will change. Increased focus on outsourcing, web enabled, flexible work place & time.<br />Traditional career paths will be at risk – part time, multiple employers, workforce will plan their professional development across companies & industries at their pace.<br />Loyalty = High performance for the assignment. <br />The future organization will need a competitive advantage in acquiring, managing and deploying talent resources-possibly fewer “employees”. <br />
  43. 43. Page 41<br />The future of total reward 3 of 5<br />REWARD STRUCTURE<br />The concept of pay ranges, mechanical reward administration will change to reward driven by value added and economic return.<br />Remuneration “structures” will be at risk. <br />Individuals who provide a competitive advantage will see increased reward differentiation – however governance on assessment processes will also be tighter and subject to scrutiny.<br />Move to the “one number” with individualized allocation. <br />
  44. 44. Page 42<br />The future of total reward 4 of 5<br />VARIABLE PAY & LONG-TERM INCENTIVES<br />Economic recession & stricter governance driving tighter plans with validated longer term business returns, hold back, moderate fixed variable ratios.<br />Change in career path view driving “pay me now” instant gratification and greater differentiation based on contribution.<br />Equity based compensation with long vesting falling out of favour.<br />
  45. 45. Page 43<br />The future of total reward 5 of 5<br />THE NEW REWARD MIX OR ECOSYSTEM<br />Differentiator in total rewards will no longer be compensation & benefits.<br />The entire ecosystem ( culture/ systems/ structure/ strategy/ employer brand ) of the organization<br />Performance Management, recognition & development opportunities<br />Flexibility <br />Total Rewards may soon be = Total Employee Value Proposition <br />
  46. 46. Page 44<br />Dos and Don’ts<br />
  47. 47. Page 45<br />Dos and don’ts 1 of 2<br />DO<br />Ensure accurate, available data<br />Value benefits using a fair, robust methodology, capable of explanation to employees<br />Have a clear, branded design<br />Personalize as far as possible<br />Include non-tangible benefits<br />
  48. 48. Page 46<br />Dos and don’ts 2 of 2<br />DON’T<br />Cut corners<br />Oversell benefits<br />Just publish numbers<br />Fiddle with contents<br />
  49. 49. Page 47<br />Case study A<br />
  50. 50. Page 48<br />Case study A <br />
  51. 51. Page 49<br />Case study B<br />
  52. 52. Page 50<br />Case study B <br />
  53. 53. Page 51<br />Conclusion & Questions<br />
  54. 54. Page 52<br />Conclusion<br />Summary<br />Questions<br />

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