TOTAL REWARD
Michael Armstrong
total reward defined
Total reward includes all types of reward non-financial as well as financial, indirect as well as direct, intrinsic as well as intrinsic. It is a value proposition which embraces everything that people value in the employment relationship and is developed and implemented as an integrated and coherent whole.
total reward definitions
Centrica Mix extrinsic and intrinsic rewards to encourage employees discretionary effort. Nationwide A mixture of pay elements, with a defined cash value, benefits which have an intrinsic value, a positive and enjoyable work environment, and opportunities for learning and development; all designed to make Nationwide an employer of choice.
Unilever Total reward encompasses all the elements of what it means to come to work.
rationale for total reward
Creating a fun, challenging, and empowered work environment in which individuals are able to use their abilities to do meaningful jobs for which they are shown appreciation is likely to be a more certain way to enhance motivation and performance even though creating such an environment may be more difficult and take more time than simply turning the reward lever.
Jeffrey Pfeffer Stanford University
Characteristics of a total reward strategy (CIPD)
Holistic - focuses on how organisations attract, retain and motivate employees to contribute to success using an array of financial and nonfinancial rewards. Best fit tailored to the organisations culture and work processes. Integrative the reward system is integrated with HR policies and practices. Strategic aligns reward and business strategies. People centred - focuses on employee needs and wants. Customised provides a flexible mix of reward that offers choice. Distinctive - uses rewards to create a distinctive employer brand. Evolutionary long-term, incremental approach
models of total reward
total reward (engaged performance) model Hay Group
quality of work
tangible rewards
work/life balance
engaged performance
future growth/opportunity inspiration/values
enabling environment
total reward model - WorldatWork
Total rewards are all the tools available to the employer that may be used to attract, motivate and retain employees. Total rewards include everything the employee perceives to be of value resulting from the employment relationship
organisational culture business strategy HR strategy
total rewards strategy compensation benefits work/life performance and recognition development and career opportunities
attract motivate retain
employee satisfaction and engagement
business performance and results
total reward model Watson Wyatt
business strategy
human capital strategy
total reward strategy
fixed reward costs fixed costs of employment value of role to organization performance-based rewards variable costs of employment environment-based rewards intrinsic rewards employment deal
contribution made by individual
effective delivery through focused communication, greater flexibility and use of technology
total reward model - Towers Perrin
TRANSACTIONAL (TANGIBLE)
PAY/REWARD
base pay contribution pay shares/profit sharing recognition LEARNING AND DEVELOPMENT workplace learning training performance management pensions health care perks
BENEFITS
flexible benefits WORK ENVIRONMENT
core values
leadership employee voice job/work design
career development
RELATIONAL (INTANGIBLE)
total reward model - Michael Armstrong
base pay transactional rewards contingent pay employee benefits total reward learning and development relational rewards the work experience recognition, achievement, growth non-financial rewards total remuneration
total reward at Nationwide
Development
Our strategic objective for rewards : To attract, retain and motivate people to perform to the highest standards possible Those who excel by living the values and contributing the most will benefit the most
Reward Environment
Committed and engaged employee
Leadership behaviours
Quality of work
Norwich Union Insurance: total reward framework
reward
performance
pay benefits
progression, performance and pay
recognition brand supporting behaviour challenging work
development
career framework
learning opportunities personal development
career opportunities meaningful job content
conduct diagnostic review monitor and evaluate define objectives
communicate
making total reward happen
develop approach
(involve)
implement progressively
(encourage/guide)
prioritise design
total reward issues
How do we convert rhetoric into reality? Should we distinguish between total reward and total remuneration? How are we going to persuade people that total reward is a good thing?
How are we going to communicate the benefits of total reward?
What priorities do we give to the different elements of total reward package? How do we make total reward work, bringing the elements in the package together?
email@ michael-armstrong.eu
