Human Resources Strategic Projects-Teacher/Student Resources
A comprehensive rewards strategy is a plan put in place by a company that offers financial, advantageous, and developmental benefits to staff members who meet certain objectives. The combination of the strategy includes pay and benefits with chances for career growth in a positive organizational structure (Gardner, n.d.). A successful total rewards system motivates staff to perform more work, stay with the company longer, and recruit new talent.
The purpose goal of a compensation strategy (total rewards plan) is to stay competitive as an organization. Organizations conduct surveys and an audit and, based on the result, compare the results to the others in the industry. Another goal is to be able to retain the existing talents in the organization.
For the purpose of this strategy, identified stakeholders needed to bring on board to have a holistic approach to this plan/proposal. They are as follows:
- The employees – different departments
- Line managers – different departments
- Human Resources Manager
A comprehensive rewards strategy helps in retention and attracting employees, increases engagement and satisfaction of employees, and all these ultimately lead to improvement in business performance.
A wide range of potential workers will be drawn to a comprehensive rewards strategy that may be able to meet all of the demands. As a result, this speeds up the hiring process for new employees, and a business may draw from a wider pool of candidates. Employees who grow and change from one period of life to the next while still having their requirements covered by an efficient, comprehensive rewards program have a high likelihood of being satisfied at work. By rewarding excellence, a comprehensive rewards strategy helps firms compete more effectively in their sector.
The company may also effectively compete for talent and establish itself as the employer of choice in its industry. The company achieves its objectives and surpasses its competitors if it can find and keep skilled personnel. In other words, top-performing firms frequently arise from highly engaged, productive personnel.
A total reward plan offers an effective and exclusive reward package for employees who achieve specific organizational goals. The reward can either be monetary (money) or non-monetary (other benefits). A total reward plan emphasizes empowering or motivating employees. It includes aspects that workers value. It could include flexible work, fair reward systems, and an increase in pay and benefits package. The five components of the total rewards plan are compensation, benefits, well-being, recognition, and development, and are correlated to Maslow’s hierarchy of needs (Gardner, n.d.).
According to the Society for Human Resource Management (n.d.), an effective total rewards plan may be developed through a four-step process. The steps include:
- Assessment of the current benefits and compensation system
- Designing a rewards plan that will be ideal for the organization
- Execution of the new strategy to the employees
- Evaluation of the effectiveness of the plan and modifications made where necessary
A total rewards plan is important for any organization. It ensures higher employee retention rates, improved performance and productivity, increased employee satisfaction, and improved business performance (Society for Human Resource Management , n.d.).
Upper and mid-management officers in the organization are the resources. They can include experts in project management, finance, employment law, payroll and compensation, human resources professionals with extensive rewards experience, external consultants, a union official (if the organization is unionized), representation from the non-unionized workforce and IT experts.
- Create a compensation committee and develop a program outline.
- Build a compensation philosophy and design a compensation program.
- Conduct a job analysis for all positions and rank jobs within each department.
- Establish salary range and pay structure.
- Develop all necessary compensation policies.
- Meet with stakeholders and obtain top executive approval.
- Document and communicate the full compensation program to all employees and managers.
- Implement a compensation plan and monitor for adjustment when needed.
1. Form a compensation committee and develop a program outline.
1.1. Set a compensation committee and appoint a compensation manager from the human resource department.
1.1.1. Explain the job description for each member of the team.
1.1.2. Determine the cost of consultant outsiders versus working within.
1.2. Set objectives for the compensation program.
1.3. Establish a target date for implementing and completing the compensation plan.
2. Build a compensation philosophy and design a compensation program.
2.1. Outline basic principles that will underline the compensation plans.
2.1.1. Decide how competitive the organization should be across industry rates.
2.1.2. Decide the extent to which employee benefits should replace or support cash compensation.
3. Conduct a job analysis for all positions and rank jobs within each department.
3.1. Conduct a general task analysis for all departments.
3.1.1. Get information from top managers from various functions to determine the organizational structure and functions of each department.
3.1.2. Interview department managers and key employees to determine their job function(s).
3.1.3. Develop a model job description for exempt and non-exempt positions.
3.1.4. Review job description with department managers, adjust if necessary and develop a final draft.
3.2. Rank the jobs within each department, and then rank jobs between and among departments.
3.2.1. Compare ranking with industry market standard and adjust when necessary.
3.2.2. Build a matrix organizational review and compare data with the company’s structure and industry-wide market.
3.2.3. Prepare a flow chart for all ranks and present data and chart to the compensation committee for evaluation and adjustment.
4. Establish salary range and pay structure.
4.1. Create the various level, from entry-level to senior level, and assign grades to each.
4.2. Create a market pay line and establish the pay ranges for each position and job classification.
4.3. Make sure it is in accordance with company policies.
5. Develop all necessary compensation policies.
5.1. Generate a company policy.
5.1.1. Create and document special policies for the selected group.
5.1.2. Create and document a strategy for other pay adjustments like promotion, annual review etc.
5.1.3. Create and develop procedures to back up the policies.
5.2. Meet with the committee to review and adjust policy if needed.
5.2.1. Determine if the compensation plan is fair, equitable, and defensible.
6. Meet with stakeholders and obtain top executive approval.
6.1. Present all data to executives and key stakeholders for deliberations, review, adjustment, and approval.
7. Document and communicate the full compensation program to all employees and managers.
7.1. Use several methods of communication to share the plan.
7.1.1. Make a presentation to everyone, send emails, put fliers in common areas etc.
7.1.2. Expect loads of questions, answer them, and give more explanation where necessary.
7.2. Properly document the end product of the process for future reference.
8. Implement a compensation plan and monitor for adjustment when needed.
8.1. Work with HRIS staff to establish effective implementation procedures.
8.2. Monitor feedback from all and make changes and modifications where needed.
Class of 2022 Contribution: Arekhandia Okojie, Linda Adegoke, Mourya Millan Sahoo, Purity Maondo, Wuraola Odesanya