Total Rewards Management (HRM 533)
Total Rewards Management
It is imperative for companies to have comprehensive strategic reward systems for their respective employees with systems being able to address compensation, appreciation, recognition, and benefits. In the contemporary firms, most often companies miss the recognition and appreciation aspects of employee motivation and inspiration with much focus on compensation and benefits. There are various ways in which organizations can be grateful for the jobs done to them by their esteemed employees. As such, monetary and non-monetary methods of reward system is vital if such firms instituted to reward their staff. Many employees like to be evaluated amongst their peers and be recognized for their distinguished work within a particular firm. A recognition of the same, rewarding or compensating them motivates and inspires better performance. To be singled out also assist them to know their contributions to the entire organizational operations. As such, rewards systems can involve paid leave, paid trips, access to recreational facilities, health insurance cover, educational funds, certificates, and trophies, featuring in company magazines, cash benefits, and bonuses among other methods as will be discussed herein.
Cascio (2018) advances that a comprehensive reward system is imperative for attracting, recruiting and retention of employees as they will be attracted to the vast rewards they are expecting to receive within an organization. In rewarding systems, performance and behavior are recognized. Compensations are vital components of the reward system since it gives payment for work done. The principle guiding feature of such a reward mechanism is a fair pay for a fair job done such that is a person does complex and tedious jobs, they compensation must be in line with their respective job description and job specifications. Benefits on the other side are some complementary aspects of the rewards system apart from the compensations of a person. Benefits are in terms of bonuses where a sales team is given bonuses for meeting their sales targets. Employees are able to notice benefits they are entitled to if any within an organization and if a firm operates without benefits, it will be very difficult to attract or even retain top employees.
However, it is essential to acknowledge the place of appreciation and recognition in the reward system of an organization. The two elements, recognition and appreciation rarely get the attention of business owners despite the fact they are less expensive with high returns (Cascio, 2018). Recognition can be in form of a mention at a firms function, appreciation can be in form of having a dinner with the bosses or featuring in the company magazine and other publications. As such, the four elements of recognition, appreciation, compensation, and benefits go a long way to inspire and motivate employees to deliver their best to the workforce, maintain a good organizational culture, help in their retention and attracts top-quality employees for new recruitments.
Importance of Innovations in Employee Benefits
Innovations in employee benefits can improve the overall competitive compensation strategy of the organization in a number of ways. Developing salary range is an innovative way of making compensation strategy very competitive in organizations. Developing a salary range is vital as it gives the organization a competitive nature by doing a comparative analysis with other competitor organization (Shields, Brown, Kaine, et al. 2015). It helps to define the salary averages for the work being done by an employee. The various job descriptions and job specifications are vital across organizations and almost similar. Therefore, benchmarking gives a good range of practice from other competitor organizations. The salary range also defines the specific tasks and how best to compensate and give employees benefits related to the jobs. Salary range is an innovative aspect of compensating workers and gives a competitive and better way of appreciating employees, hence organizational harmony and maintained the organizational culture where people strive to deliver the best for the benefits and remunerations they get.
Innovations in employee compensation involve salary audits since there are constant shifts in markets (Cascio, 2018). Per se, it is important for organizations to carry out routine salary audits to ensure that what they compensate their workers is the market trend and value. Salary audits are able to define if a profession is declining or if it’s on the rise and there is increased market demand for such professionals. Compensation trends in a particular industry will be informative to an organization`s competitive compensation strategy. For instance, an industry could be paying good monetary compensation to the employees and if a firm is not able to do an audit to know such trends and the amount of work, it can end up underpaying or overcompensating the employee. The auditing is thus useful in defining the type and nature of compensation a firm gives to her employees. It can decide to give the monetary compensation as the market trends but besides that, it offers other packages that will be instrumental in worker retention and recruitment.
Innovations help compensation strategy systems improve as employees will be able to get more value from their inputs besides the financial compensations for their labor (Shields, Brown, Kaine, et al. 2015). Benefits of being taken to a bench making a trip out of the country and other seminar and workshops due to exemplary work is done gives more satisfaction to the employees. Therefore, the compensation is reinforced by simple acts of benefits to the workforce. In addition, innovation in compensation involves the critical and creative ways of recognizing the hard work of employees thus can take many forms. For instance, competitive compensation strategy can be improved through punitive actions too. Other employees will be motivated to work better and the firm will be able to offer better compensation if actions are taken against acts and behaviors that do not add value to the organization. Such actions include those that damage the code of ethics as required by the organization. If an employee is involved in such action, his salary or bonuses can be reduced or cut depending on the level of damage. Those working in the sales department and are not able to meet targets are blacklisted and contracts terminated. It will help other employees to work hard and meet their targets. In addition, money would be saved or used to compensate other employees who meet or pass their target limits.
How Innovative Benefits Could be Tied to Specific Jobs.
Innovative benefits could be tied to specific jobs in a number of ways as the job descriptions and specifications depict. Kuppuswamy, Saminathan, et al. (2017), notes that the industry is able to influence a number of innovative ways of giving benefits to employees in particular jobs. Innovative benefits could be tied to a job by the scope with which the job is able to influence the organization. For example, a driver who is driving the senior employees and other workers with the organization are known by a majority of the working staff. He picks and drops employees to and from work daily. Featuring such a person on the cover of the magazine as a contributing person to the success of an organization is vital. Commissions from sales can be tied to the sales department employees since the targets are set for each and every person working under sales. Such that any employee who is able to make a sale beyond the target is given a percentage of the sales made. In most instances, other people will be able to work overtime to meet their targets both at home and at the workstation. Case in point is insurance companies.
In a factory where production is dependent of the technical expertise, innovative benefits can come in form of taking the machine operators for specialized educational training often to cope with the changing organizational and mechanical needs of the industry. Such training can be limited to hard-working employees and selection subjected to a competitive structure within the organization. Employees will benefit from such training and competitiveness and hard work will be inflicted within such job specifications amongst other members of the group. By taking the machine operators to specialized treatments, their retention to the job is increased and they look forward to more opportunities that will sharpen their skills. Other prospective employees will be attracted to the firm due to such training and level of preparation of the firms, workers to do their jobs.
Equity-based Rewards Systems vs. Creative Approaches
Equity-based approaches to a reward system are composed of giving fair compensation for the fair amount of work done. It involves the people working together to accomplish a certain task given fair compensations in terms of monetary gains and other benefits as they deliver the same output. Equity is seen when irrespective of the age and qualifications to a job, compensation is based on the output. Innovative ways of compensation involve other unconventional ways of compensating individual outstanding work within the organization (Kuppuswamy, Saminathan, et al. 2017).
Equity-based approaches are important is building teamwork as all employees will be subjected to the same share of benefits from a collective work. Either as a group of people within the same job description and specification. The harmony comes in that people will work as teams and register equality. However, the system is poor since it doesn’t inspire individual hard works and struggles. The people can be working under same job specification and description but some people within the same bracket may hold higher qualifications. Other employees might be in lower job positions but their creativities and innovative ideas are not celebrated and credit given to the entire group. Such group of employees will not be motivated and might be difficult to retain them within the same organization.
Other creative methods of compensation are able to give credit where it`s due and people are compensated and receive benefits from their individual efforts and contributions in a number of ways that benefits both the organization and the employees. For example, when an employee has done an exemplary work, it will be important and more beneficial if he or she received thank you letter from the bosses. Other cases can involve the person being given a paid leave with their spouse for a holiday fully funded by the organization. Giving somebody tuition fees for their education will be imperative in retaining an employee. An employee can get fees from the organization as a grant or a loan with very little interest paid over a long period of time. However, such creative measure might bring little unrest if the methods of awards are not made public and criteria open to everybody. In addition, a single person might be singled out in a group work thus creating more division within the organization.
Key elements of integrating innovation into a traditional total rewards program
The key elements for integration of innovation in the traditional forms of total reward system include compensation and benefits, career development, and a work-life balance. Compensation and benefits are traditional total reward systems. Except such compensations were as agreed in the terms of a contract which would hardly be audited over time but structural established systems would guide the modalities of compensation. Cloutier, Felusiak, Hill, et al., (2015), advances that benefits were negotiated and predetermined such that employees had pre-informed ideas about such benefits. However, innovation makes compensation and benefits more flexible and easy. It should complement the traditional form of compensation by introducing elements like salary range and salary audit. Salary range defines the job description and specification hence establishing the value of compensation for a particular job. In such compensations and benefits program, an employee is entitled to both monetary and non-monetary gains. Like financial rewards on fixed pay, variable pay, long-term incentive pay and short-term incentive pay among other benefits like paid leave, reimbursement of educational fees, and workshops or seminars.
Conversely, career development and work-life balance is part of an innovative element that can be integrated into the traditional total rewards program (Fisher, 2015). Career development entails an employee being given opportunities to grow within the organization and be placed in line for a replacement of a senior employee who has retired or left his position for various reasons. Career development thus means that a person would be recruited into a company, then he will undergo mentoring services where he/she can be taken to training, seminars, and conferences to be well equipped for future opportunities. Work-life balance will give people time to blend their work life with personal life. For instance, a company can give mothers, time to breastfeed their babies and organize for their young children a place to be housed under good care as they continue with company work. Time off can also be given to employees to attend to their personal matters like weddings or birthday parties. Under such an arrangement as a reward system, a firm will be able to build a brand identity and will have an easy time in attracting, recruiting and retaining employees.
Conclusion and Recommendation
In summary, it is recommendable for organizations to open up a comprehensive organizational mode of communication. In such a system, the employers will be able to have a forum with their employees both in physical meetings and online interactions through organizational apps. Such forums will be used to articulate the grievances of the employees, their complaints, and compliments on the organizational management. The management will be able to evaluate and analyze the mood of the employees and pick issues of their priorities which if affected can raise their work inputs and results in massive outputs for the firm. Additionally, the companies should be receptive to workers union. Where the union exists it will be easy to communicate the issues of the workers to the management. Moreover, when the management has recommendations and issues to share with the employees, the leaders can be called and the matter addressed. It is on such spirit of the enhanced communication system and labor relations that will refresh the total reward system where employees-based decisions will benefit both the workers and the organization.
Cascio, W. (2018). Managing human resources. McGraw-Hill Education.
Cloutier, O., Felusiak, L., Hill, C., & Pemberton-Jones, E. J. (2015). The importance of developing strategies for employee retention. Journal of Leadership, Accountability and Ethics, 12(2), 119.
Fisher, J. G. (2015). Strategic Reward and Recognition: Improving employee performance through non-monetary incentives. Kogan Page Publishers.
Kuppuswamy, N., Saminathan, V., Udhayakumar, M., Vigneash, L., & Gopalakrishnan, P. (2017). The Role of Motivation on Employee Performance in an Organization.
Shields, J., Brown, M., Kaine, S., Dolle-Samuel, C., North-Samardzic, A., McLean, P., & Plimmer, G. (2015). Managing Employee Performance & Reward: Concepts, Practices, and Strategies. Cambridge University Press.