The document provides an overview of total rewards management. It discusses that total rewards includes all compensation and benefits that employees value in the employment relationship, including pay, benefits, work-life programs, and professional development. It emphasizes that retaining top talent is important to business success and that engaged employees can significantly impact business outcomes like revenues, profits, and growth. The document also covers considerations for re-tuning total rewards programs, such as trends in compensation, benefits, healthcare, private exchanges, and base pay. It stresses that professional development and leadership have a direct impact on retaining critical talent.
2. Total Rewards Expertise
Executive Benefits Health & Welfare
Healthcare
Analytics
Human Resources
& Compensation
Retirement Plan Voluntary Benefits
Multinational
Benefits & HR
Institutional
Investment &
Fiduciary Services
3. Discussion Points
• What is Total Rewards?
• Key elements of Total Rewards
• Why is a Total Rewards
Strategy important?
• Considerations for Re-
Tuning your Total Rewards
Program
4. What is Total Rewards?
Everything
an employee
values in
the employment
relationship.
A system of rewards.
Not just compensation and benefits.
Includes compensation and non-compensation
elements
7. Compensation
• Fixed Pay - base wages
• Variable Pay – pay at
risk
– Short term Incentive
Pay
– Long-term Incentive Pay
8. Employee Benefits
• Health & Welfare
– Medical, Dental, Vision
• Income Protection
– Life, STD, LTD
• Retirement
– Defined Benefit/Contribution
• Executive
– Non-Qualified Deferred Comp
• Financial Support
– FSA, Education Assistance
9. Work/Life Programs
• Culture of Wellbeing
• Telecommuting
• Flexible work schedules
• Parental Leave
• Reduced Hours
• Community Service Time
• Job Sharing
• On-Site Daycare
• Concierge Services
10. Professional Development
• Employee development based on
stated career goals. Focus is on
enhancing both technical skill set
and competencies or “soft skills”
–Traditional training programs
–Mentoring from management or
other respected company leaders
–On-the-job or stretch assignments
• Employee recognition programs
12. Your Top Talent is
KEY to your Total
Rewards Strategy…
as retaining this talent is
important to your
business success
13. External Factors Influence the Necessity of a
Fluid Total Rewards Strategy
1. Ever-changing PPACA landscape and
various provision delays
2. Changing workforce demographics &
dynamics
3. A much more competitive business
environment
4. Substantial increase in healthcare costs
14. External Factors Influence the Necessity of
a Fluid Total Rewards Strategy
5. Rapid decline of Defined Benefit
pension plans as viable retirement
source
6. Advancement of pay-for-
performance practices
7. New interest in Private Exchanges
and Defined Contribution strategies
8. Competition for Talent (Skill Shortage)
15. A Solid Talent Management Foundation
is Key to Total Rewards
Establish and Maintain
Alignment w/
Organizational Objectives
Job Descriptions
On-boarding
Competency Models
Performance Management
Build on Organizational Strengths and Grow Talent
Individual Development Plans
Coaching & Mentoring
Leadership Development Programs
Anticipate & Plan for the Future
Staff Portfolio Management
Succession Planning
Strategic Planning
16. Identifying Critical Talent is Key
• Know your organizational strategy &
identify key competencies needed to get
there
• Conduct a Talent Inventory – bench
strength & future leaders (i.e., Nine Box).
• Critical talent identification should extend
beyond the top executive level to all tiers of
the organization that play a pivotal role in
the success of the business.
• Identify “stakeholders” - top 15%
of the company that:
– Directly impact Financial Net Income
– Would be difficult to replace
17. Know What’s Meaningful
to Critical Talent
Rank Employers
1 Challenging Work
2 Career
Development
Opportunities
3 Org Mission, Vision,
and Values
4 Base Pay
5 Org financial performance
Rank Employees
1 Job Security
2 Base Pay
3 Career
development
opportunities
4 Promotion opportunity
5 Health care benefits
What Employers THINK their
Hi-Po’s define as important
What Hi-Po’s REALLY THINK
is important
Source: Towers Watson
19. The number one factor in increasing the level
of highly satisfied and engaged
CUSTOMERS in your businessis…
The level of highly satisfied and engaged
EMPLOYEES in your
business.
20. Impact of Engaged Employees
• Actively disengaged
employees can reduce
revenues by up to 22%
• Highly engaged employees
can drive profits UP by as
much as 189%
21. Impact of Engaged
Employees on
Business Outcomes
Difference Between Top and Bottom Quartile Performance
Top decile
Companies have 3.9
times the Earnings
Per Share (EPS)
GROWTH RATE
Employee Engagement and Critical Business Outcomes
2018 Total Rewards Survey: AON Hewitt
23. Sales in 1998 =0 Sales in 2008 =1.2Zappos
Billion Looking back, a big reason we hit our
goal early was that we decided to invest
our time, money and resources into three
key areas: customer service (which would
build our brand and drive word-of-mouth),
culture (which would lead to the formation of our
core values), and employee training and
development (which would eventually lead to
the creation of our Pipeline Team).
Even today, our core belief is that our
Brand, our Culture and our
Pipeline are the only competitive
advantages we will have in the long run.
Everything else can and will be copied.
24. REMEMBER MASLOW? EMPLOYEE ENGAGEMENT AND
TOTAL REWARDS GO HAND IN HAND
Self
Actualization
(Reaching full
potential)
Aesthetic Needs
(Order and
beauty)
Cognitive Needs
(knowledge and
understanding)
Esteem Needs
(Positive self-image)
Belonging and love
(Affection, identification with a group)
Safety and Security Needs
(long-term survival)
Physiological Needs
(Short-term survival)
Advancement,
professional growth, work-
life
Interesting,
challenging work
Learning &
development
Recognition,
promotion,
performance
feedback
Affiliation &
coworkers
Other
compensation,
health & retirement
Base salary
25. Percent of Companies Aligning Rewards
with Business Objectives
2018 Total Rewards Survey: AONHewitt
27. Current Trends in Total Rewards Programs
More Emphasis Less Emphasis
Compensation Programs 67% 33%
Learning & Development
Programs
66% 34%
Wellness & Disease
Management
64% 36%
Health Programs (medical,
dental, vision)
63% 37%
Retirement Programs 51% 49%
Welfare Programs/Risk
Benefits
39% 61%
Source: 2018 Top Five Global Employer Rewards Priorities Survey: Deloitte
28. Planned Investments in Total Rewards Programs
Increased Spending
Wellness 67%
Manager
effectiveness/
coaching
62%
Training 57%
Career
development
55%
Recognition
programs
41%
Culture 41%
Decreased Spending
Post-retirement
medical
29%
Retiree Medical 24%
Pension/defined
benefits
19%
Healthcare
Benefits (medical,
dental, vision)
14%
Concierge
services
10%
Long-term
incentives
7%
Source: 2018 Top Five Global Employer Rewards Priorities Survey: Deloitte
29. Health Care Trends
• 2014 Total Health Benefit Cost per employee is
expected to be $12,535
– Includes employer and employee shares
– Up from $11,938 in2013
• 95% of employers expect healthcare benefits to
undergo either modest of major changes by 2018
– PPACA impacting bottom line
– Costs continue to rise well above rate of inflation
2014 19th Annual Towers Watson/National Business Group on Health Employer Survey on Purchasing Value in Health Care
30. Health Care Best Practices
• The Most Successful Companies are
making strides in six core areas:
– Health Improvement
– Engagement
– Accountability
– Linking providing strategies
– Technology
– Healthy environment
2013 18th Annual Towers Watson/National Business Group on Health Employer
Survey on Purchasing Value in Health Care
31. Private Exchanges and Defined Contribution
•What is a Private Exchange?
Sponsored benefitsmarketplace
Processvs. transaction
ShoppingExperience oSponsor
selects vendors oBudget
determined
oEmployees purchase based on
need using decision support tools
Way for employer to cap expenses
Alternative to public options
32. Private Exchanges and
Defined Contribution (cont.)
•What is Defined Contribution?
Similarto defined contribution for
retirement (e.g. 401k)
oEmployer establishes budget
oDetermines buckets
Linkto Total Rewards philosophy
oBudgeted growth
oPerformance factor
Givesemployees ownership in
how they spend
33. • The Mercer study
shows that the average
raise in base pay for
2014 in the U.S. is
projected to be 2.9%.
• Employers are
using the dollars
they do have
available to reward
performance.
• Average salary
increases (based on a
five point rating scale)
shows the highest
rated performers
getting base increases
approximately 180% of
those received by their
middle rated cohorts.
Base Pay Trends
Mercer 2013 Salary Trend Survey
Performance Rating Percent of
Workforc
e
Average
Pay
Increas
e
Highest-rated 7% 4.60%
Next Highest-rated 30% 3.50%
Middle-rated 54% 2.60%
Low-rated 7% 0.90%
Lowest-rated 2% 0.20%
34. Salary Budget Information
0.0% 1.0% 2.0% 3.0% 4.0%
Actual 2007 3.9%
Actual 2008 3.9%
Actual 2009 2.2%
Actual 2010 2.5%
Actual 2011 2.8%
Actual 2012 2.8%
Actual 2013 2.9%
Projected 2014 3.1%
World at Work Survey Data / Projection for 2014
Salary Budget Trends
35. Professional Development
• Tuition Assistance
• Mentoring Programs
• Succession Planning
• Leadership Development
• Individual Coaching
• Training
• Career pathways (with on and off
ramps throughout the career life
cycle)
36. Professional Development Best Practices
• Think holistically about people development:
– Only 10% of someone’s on-the-job behavior change
comes from training
– 20% comes from assessment/feedback
– 70% comes from on the job experience
• Cross functional teams
• Cross group teams
• Ad Hoc committees, special projects, etc.
• Informal methods of
development/information sharing become
ever important in today’s workplace
(blogs/wikis/on-line forums/internal expert
directories).
37. Leaders Have a Direct Impact on Critical Talent
Source: The Post-Recession Workplace: Competitive Strategies for Recovery & Beyond, SHRM 2010
Leadership
Competencies
• Strategic thinking
• Strong personal
ethics/values
• Emotional
intelligence
• Business acumen
• Managing change/
chaos/
innovation
• Risk management-
dealing with crisis/
transition
• Global mindset
Leadership Soft
Skills
• Communication
• Planning &
organizing
• Personal
effectiveness
• Workforce diversity
& cross cultural
relations
• Collaboration/team-
orientation
• People
development
Leadership Styles
• Authenticity
• Collaborative
knowledge & power
• Trust/credibility-
building
• Openness to
learning
• Managing with
transparency
• People-first
management
• Leading by
example
38. Leaders Have a Direct Impact on Critical Talent
5 Keys for Leaders:
1.Know Them
2.Grow Them
3.Inspire Them
4.Involve Them
5.Reward Them