Every employee receives a paycheck and translates that paycheck into a lifestyle. Understanding an Organisation’s compensation program is critical in developing HR strategies that help employees feel motivated, recognized, and rewarded. Failing to understand compensation in Human Resources, this in turn can minimize an organization’s overall success.
Compensation Pay provided by an employer to an employee for services rendered include both fixed and variable pay tied to levels of performance
The owner or operator usually bore the responsibility for people’s pay, and little was offered outside of cash compensation. Only a handful of companies offered pensions, profit sharing, and guaranteed wages to skilled workers few safety nets such as medical insurance, unemployment compensation, Overtime pay, or social security.
Programs an employer uses to supplement the cash compensation that employees receive
Benefits become popular as an acceptable way to evade wage and price controls. Benefits can be defined as all of the employer’s available tools that may be used to attract, motivate, and retain employees. Why do employees choose to stay with a particular employer? Why do they leave? What factors motivate performance and commitment? The answer lies in these questions with Benefits Perspective.
% Direct/Indirect Financials [Base Salary, Bonus, Cash Profit Share, Stock
Programme, Company Cafeteria/stores, Fitness Facilities,Health&Wellfare
Benefits, Scholarships]
% Work [ Challenging Work, Constructive Feedback, Flexi_hours, Job Skills
Training, Promotion, Performance Management, Safe work environment, Career
Advancement, Coaching, Management Development, Service awards, Open
Communication]
% Affiliations [Atheltic Leagues, Symposiums, employee Clubs, Volunteer
Associations, Shuttle Services, Legal Services, Wellness Program, Employee's
Assistance Programme]
𝐎𝐛𝐣𝐞𝐜𝐭𝐢𝐯𝐞
To produce desired, measurable results that send the right signals to employees and deliver an excellent return on the organization’s investment (ROI). Drive desired behaviors in the workforce reinforces the overall strategy and ensures the organization's vision. The solution is to find the right mix of Benefits that satisfies the personal and financial needs of a current and potential workforce given existing business conditions and cost barriers. Benefits include health, income protection, savings, and retirement programs that provide security for employees and their families.
𝐂𝐨𝐦𝐩𝐞𝐧𝐬𝐚𝐭𝐢𝐨𝐧::𝐂𝐨𝐫𝐞 𝐄𝐥𝐞𝐦𝐞𝐧𝐭𝐬
Fixed Pay Base pay, Non-discretionary compensation that doesn’t vary according to
performance or result achieved.
Variable Pay pay at risk, variable pay changes directly with the level of performance or
result achieved. It’s a one-time payment that must be re-established and re-earned
each performance period.
Short Term Incentive pay one year or less period of timeframe used to gauge the focus
and rewards performance.
Long-term Incentive Pay longer than the one-year timeframe for gauge focus and
reward performance forms include stock options, restricted stocks, and performance-
based shares, units, and cash.
𝐁𝐞𝐧𝐞𝐟𝐢𝐭𝐬::𝐂𝐨𝐫𝐞 𝐄𝐥𝐞𝐦𝐞𝐧𝐭𝐬
Social Insurance
Unemployment
Worker’s Compensation
Social Security
Disability (Occupational)
Group Insurance
Medical
Dental
Vision
Prescription Drug
Life Insurance
Disability
Retirement
Savings
𝐄𝐦𝐩𝐥𝐨𝐲𝐞𝐞 𝐚𝐧𝐝 𝐄𝐦𝐩𝐥𝐨𝐲𝐦𝐞𝐧𝐭-𝐕𝐚𝐥𝐮𝐞 𝐑𝐞𝐥𝐚𝐭𝐢𝐨𝐧𝐬𝐡𝐢𝐩
Global Village with work moving to different parts of the world to take advantage of
large-cost manpower and addresses skill gap [ITES]
Hybrid Work Technology continues to revolutionize work, not only in terms of
automating more jobs but also in enabling the virtual workplace as more professionals
conduct business in Home offices or Remote locations. [New Normal]
Power Corridors Traditional hierarchical distinctions have eroded in the faster decision-
making and speed to market. Teamwork is one of the most concerning behaviors rated
in performance reviews.
Mobility Is taken for granted with workers averaging six employers over the course of a
career.
Diversity Becomes a respected value in the employment domain demonstrated
through a range of specific programs.
C-suite Increasingly believes that employees are productive drivers rather than cogs in
a large wheel.
In the shift toward a more ITES and knowledge-based economy, the relationship or
the deal, between employer and employee, began to evolve as well. To retain talent
pool, what it would take to attract, keep and engage them in giving discretionary
efforts on the job, here come Total Rewards in the picture.
𝐓𝐨𝐭𝐚𝐥 𝐑𝐞𝐰𝐚𝐫𝐝𝐬
Reward-Ing about working for a particular employer or everything an employee gets as a result of the employment. ‘Value Proposition or Total Value’ Total Rewards need to more strategy reinforce business strategy. Companies are concerned about sending a clear business message to employees. A properly structured Total Rewards package sends a key message [USP] by aligning all components of Total Rewards with the overall business vision; a company ensures its workforce is on the same page. “Everything that employees value in the employment relationship”
𝐂𝐨𝐦𝐩𝐨𝐧𝐞𝐧𝐭𝐬 𝐨𝐟 𝐓𝐨𝐭𝐚𝐥 𝐑𝐞𝐰𝐚𝐫𝐝𝐬
Compensation
Benefits
Work_Life
Performance & Recognition
Development & Career Opportunities
Work_Life Efforts to help employees achieve success at both work and home.
Workplace Flexibility
Paid & unpaid time off
Health & Well-Being
Caring for dependents
Financial Support
Community Involvement
Management Involvement/Culture
Change Interventions
𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 𝐚𝐧𝐝 𝐑𝐞𝐜𝐨𝐠𝐧𝐢𝐭𝐢𝐨𝐧
𝐏𝐞𝐫𝐟𝐨𝐫𝐦𝐚𝐧𝐜𝐞 A key component of organizational success, performance is assessed to understand what was accomplished, and how it was accomplished, performance involves the alignment of the organizational, team, and individual effort toward the achievement of goals and organizational success.
𝐑𝐞𝐜𝐨𝐠𝐧𝐢𝐭𝐢𝐨𝐧 Acknowledges or gives special attention to employee actions, efforts, behavior, or performance. It meets an intrinsic psychological need for appreciation for one’s efforts and can support business strategy by reinforcing certain behaviors [Extraordinary Accomplishment]that contribute to organizational success. Whether formal or informal, reorganization programs acknowledge employee contribution immediately after the facts, usually without predetermined goals or performance levels that the employee is expected to achieve.
𝐃𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭 𝐚𝐧𝐝 𝐂𝐚𝐫𝐞𝐞𝐫 𝐎𝐩𝐩𝐨𝐫𝐭𝐮𝐧𝐢𝐭𝐢𝐞𝐬
𝐃𝐞𝐯𝐞𝐥𝐨𝐩𝐦𝐞𝐧𝐭 A set of learning experiences designed to enhance employees’ applied skills and competencies, developments, engages employees to perform better and leader to advance their organizations’ people strategies.
𝐂𝐚𝐫𝐞𝐞𝐫 𝐎𝐩𝐩𝐨𝐫𝐭𝐮𝐧𝐢𝐭𝐢𝐞𝐬 A plan for the employee to advance their own career goals and many include advancement into a more responsible position in an organization. The Organisation supports career opportunities internally so that talented employees are deployed in a position that enables them to deliver their greatest value to their organizations.
A more limited view of rewards can be more costly because organizations tend to respond to every situation with cash. Total Rewards supports moving away from infective programs toward those that help drive the business forward, a Stronger emphasis on job enrichment, flexible work schedules, and the overall work environment. Total Rewards approach fits with a movement way from cash and stock.
𝐀𝐝𝐯𝐚𝐧𝐭𝐚𝐠𝐞𝐬
Increased Flexibility
Improved Recruitment & Retention
Reduced Manpower Costs/Cost of turnover
Heightened visibility in a Tight Manpower
Market Enhanced Profitability
Effectively executing an appropriate Total Rewards strategy can increase a company’s market premium. Unfortunately, weak execution means many companies are leaving at least some of this money on the table.
𝐇𝐑 𝐒𝐭𝐫𝐚𝐭𝐞𝐠𝐲
The HR philosophy consists of management’s values and beliefs about its approach to the employee relationship. Both HR philosophy and business strategy are key components to the development of an HR strategy. It consists of the organization’s overall plans for recruitment, retention, and talent management of employees. The Total Rewards system strategy follows the HR strategy. It consists of the plans that will be used to support the organization’s HR Strategy.
𝘗𝘢𝘳𝘦𝘯𝘵𝘩𝘦𝘵𝘪𝘤𝘢𝘭 𝘔𝘢𝘳𝘬𝘴
Communication’s impact on a company’s bottom line results from showing employees the ‘Benefits’ of aligning their attitudes and behaviors with those of the company.
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