Total Rewards Model Revision

Total Rewards Model Revision

• The total rewards approach is clear, now revisit the total rewards model to determine the right mix of elements.
• Considerations are taken into account for the proper mix of elements.
• The total rewards model needs to satisfy current and potential workforce needs, given business conditions and cost constraints.
• The design process begins with corporate vision/mission, guiding the development of the business strategy and HR programs.
• The total rewards strategy is an extension of the HR strategy, specifically focusing on the five elements of total rewards.
• The process is iterative and returns to the corporate mission to maintain alignment.

Total Rewards Design Considerations

• Labor Market:
  • Availability of needed talent.
  • Location/demographics.
  • Competitive wages/rewards.
• Competition:
  • Industry competitors.
  • Labor.
  • Products/services.
• Legal/Regulatory:
  • Laws.
  • Wage and hour laws.
  • Government mandates.
  • Governing bodies.
  • Employment rights.
  • Taxation issues.
• Technology:
  • Self-service websites.
  • Administrative software packages.
  • Enterprise software systems.
  • Cost issues affecting the design process (time for internal/external design and review, program approval).

Implementation and Communication

• Implementation:
  • Communicating and administering programs involves resource use.
  • Funding for premiums/contributions, trust funds.
  • Compliance with legal and regulatory mandates (costs).
• Budgeting:
  • Rising health care costs increasing benefits program costs.
  • Demographic shifts influencing benefits program costs and effectiveness (recognition, development).
  • Staff to administer programs is essential.
• Globalization:
  • Global organizations need innovative methods for rewarding employees.
  • One-size-fits-all approach is not suitable, consider the global marketplace.

Employee Value Proposition (EVP)

• Employee value proposition (EVP) defines what employees give to the company and what they receive in return.
• It's a comprehensive view of the employment relationship, encompassing mission, values, culture, and total rewards programs.
• It defines "why people work here" and extends beyond a list of programs, focusing on the overall organizational experience.
• EVP is communicated to attract, motivate, engage, and retain employees; understanding EVP helps financial performance.

Total Rewards Package Communication

• Total rewards statements summarize complete total rewards package value, increasing employee appreciation and understanding.
• Employee compensation and benefits are described in the statements.
• Carefully consider and explain the intangible benefits and value tied to well-being programs as employees may not use and value all offerings.
• Data should also be itemized, including recognition and development programs.