Rewards Strategy - Assignment Example

? Reward Management Business [Pick the Contents Introduction 3 Objectives 3 Pay Structure and Pay Arrangements 5 Flexible Benefits 6 Non-Financial Rewards 6 Communication Strategy The rewards program would fail to deliver if an appropriate communication strategy is not adopted by the bank’s human resources department along with its leadership team. In order to effectively inform employees of the enhanced package after implementation of total rewards strategy and avoid raising suspicion, fear or confusion from employees; it is important that a communication strategy is devised that should start a quarter before the actual implementation (Armstrong & Brown, 2006). The first phase should include a soft introduction session given to line managers by the leadership team and the benefits to be introduced should be shared with them while taking their feedback. This should give human resources much to ponder upon and revise certain initiatives on the drawing board. The second phase should be a longer session with team leaders and line managers with detailed policies shared with them along with policy workflow, their own responsibility and a tentative timeline. After the second phase the human resources should get employee friendly posters designed, these posters should be sent to each line manager for their branch or department. It is imperative that the posters must be friendly and should emphasize on the benefits of total rewards, since line managers know about the benefits employees can share their concerns with them and recommendations should be routed to human resources using a toll free number or a global email address. As the time of implementation gets closer a grand ceremony should be arranged where all the employees are present in the arena and regional employees are connected through video conferencing. In this session the human resource lead should present a case study of an employee and share all the enhanced benefits and related policies. A Q&A session is vital and each concern should be addressed in that particular session, and on the date of launch all employees should receive a revised electronic appointment letter having all the new benefits and a total sum of financial benefits and non financial benefits along with revised and summarized policies of training and development opportunities and workplace environment. No matter how well the awareness campaign is planned, the role of line managers is most important in making the total rewards plan a success, hence it is important to take each line manager in confidence and explain the overall increased benefits to them along with the reasons for change. 9 Discouraging the Entitlement Mentality 10 Rewards Arrangement and Flexibility between divisions 11 Responsibility and readiness of Line Managers 11 Sequence or Timeline for implementation of a total rewards Strategy 12 Change Management 12 Total Reward Framework 13 References 15 Meyers, J. 2010, ‘How Does a Contingent Payment Work?’, Viewed 29 November 2012 15 Introduction The London Provincial Bank is undergoing the same phase of growth that every organization witnesses after it balances both the internal efficiencies and performance in the market. The concern now for the Bank is to retain, reward and develop their staff resulting in a competitive advantage in the banking industry. To achieve this it is important for the bank to attain a consistency in the workforce performance with better retention techniques applied to prevailing workforce while attracting the best talent from the market. The Total Reward approach draws together all the financial and non-financial investments an employer makes for its workforce. It emphasizes all aspects of reward as an integrated and coherent whole, from pay and benefits through flexible working hours, learning and development, quality and challenge of the work itself (Manas & Graham, 2002). Total reward strategy includes everything the employee perceives to be of value resulting from the employment relationship. All of the tools available to the employer that may be used to attract, motivate and retain employees (Armstrong, 2010). The selected approach adopted for compilation of a total rewards policy is the Towers Perrin model of Total rewards, which explains the reward distribution in to communal and individual rewards with tangible and intangible nature, hence: Pay + Benefits + Learning and Development + Working Environment = Total Rewards Objectives • Improved organizational performance – helping organizations balance their investment with employee expectations and needs, to source and retain high quality staff, winning their commitment by optimizing motivation and morale, and thereby securing better value for money and greater productivity (Armstrong, 2010). • A better deal for employees – responding to employee inclination and principles to construct an environment that brings out the best in the workforce – a financial and non-financial reward package that will make existing employees want to stay with the organization, and attract prospective employees to join it (Armstrong, 2010). • Improved customer service – it has been shown that a motivated and engaged workforce provides considerable higher standards of customer services. This total rewards strategy contains brief insights on employers' existing rewards strategies and proposes a business-oriented rewards structure for the bank that will help develop talent and competencies effectively contributing to the success of our company in today’s dynamic business environment. The strategy in discussion covers all the remuneration components, short term and long term incentives along with benefits, training and development opportunities and a conducive working environment discouraging the entitlement thinking and introducing an approach emphasizing on rewards based on performance. The success of a Total Reward Strategy lies in proper communication to both employees and the businesses to ensure business performance and results through engaged and satisfied employees. Hence a communication strategy is also defined in order to promulgate the changes and promote the total rewards statements. However, the key to successfully using this plan would be to ensure that any implementation is aligned with the business and that employees understand how these changes affect and benefit them (Armstrong, 2010).. Pay Structure and Pay Arrangements According to Warren Bennis the first reason people work for is money for paying bills, supporting their families and maintaining a certain lifestyle for acceptance in society (Ken Blanchard & Scott Blanchard, 2011). The pay structure at the bank is based on grade and length of service although it is imperative for a successful rewards program to link the pay with performance (Berger, 2008). In doing so it is important that a new performance management system is adopted that focuses on individual performances that are observed, recorded and rewarded on a monthly basis, although any enhancement in pay or a promotion should be based on consistency in performance. Hence increments should be made bi-annually taking into consideration the exhibited performance of the last six months. An overnight change in pay structure can be devastating for the already maintained internal equity although a gradual change along with other rewards can be adopted from the start of next calendar year. In order to strike a balance between company profitability and the bank payroll it is important to have realistic flexibility in pay arrangements and structures. In this reference base pay for all employees should be made accessible in their accounts and a 50 – 60 percent of the pay can be taken as an advance salary and personal loans with zero interest should be made available to the bank employees. To integrate and adopt a total reward policy profit sharing and company share distribution amongst employees should be introduced, on the basis of unit or departmental performance where profit sharing and part in bank ownership given to employees on completion of employment years with the company as a part of rewards for exhibiting loyalty. Flexible Benefits Besides the core benefits flexible benefits such as housing, disability protection, children and employee education, daycare should be introduced. It is important to inculcate within the policy the option for employees to take cash against these benefits. Housing loans should be provided on minimum mark up and should be tied to a buy back option upon resignation from the company. Similarly employee’s children should be rewarded for performing well in their education by setting up a savings account for them; this not only encourages minors to aspire the bank’s policies but also increases the number of customers. The already present contingent pay policy for sales staff should be extended to all employees and recommendations from line managers should be considered with an evidence of excellent performance (Meyers, 2012). In order to retain and attract better talent from the market leisure club memberships should be acquired by the bank for all employees where each employee should be entitled to one visit per quarter with his family on a paid holiday (James, 2008). Furthermore in light of increased petrol prices the company should provide each employee petrol cards with a top up system and to decrease cost a mutual understanding or a barter system should be agreed upon with at least one major oil company. Non-Financial Rewards The non-financial rewards is the major area that the bank needs to work on, in a study conducted by Hay group considering the opinion of four million employees reveals that employees value work climate, recognition and non-financial benefits more than the monetary benefits (Hay, 2001). It is important to devise a flexible work schedule in order to reward employees with better/work life balance. These flexible schedules are hard to adopt equally in our institution with formal bank timings and necessary presence of staff at branches, in order to introduced work/life balance it is important that late sitting for any reason should be discouraged as a company policy and during work hours employee with the approval of the supervisor should be able to take extended breaks for personal work, errands and education. In continuation to this all employees should be allowed to study at work upon an informal approval from the line manager (Thompson, 2012). The bank’s practices related to customer services and facilitation are top notch and we are experiencing growth in our customers and in revenues although customer feedback is ever so important in these dynamic changing times and an excellent feedback for a system, a service or an employee should be rewarded instantly with appreciation letters issued by the line manager keeping Human Resources in loop for an entry in personal records. The environment prevailing in the head office, regional offices and at branch level needs to be relaxed for employees, changing the policy on personal calls, work station personalization, bringing personal possessions and friends to bank. This measure would require enhanced security but it will enable employees to feel at home and result in a more motivated and engaged workforce (Ventrice, 2009). Another extremely helpful measure in this regard is to provide employees with free on-site or off-site meals, such a policy can include daily food vouchers on subsidized rates with a 40 percent contribution made by the employee and rest is paid by the bank. Training and development opportunities pertaining to job related trainings, departmental training and general trainings should be made available to all employees through the use of technology and recorded video casts and sessions. Each training session should be followed by a quiz that can assess the progress made by the employee, the progress in training should also reflect in employee’s performance while the training program should be monitored by a senior colleague (Thompson, 2012). Work environment, most of the time ignored by big corporations plays a pivotal role in employee satisfaction, an attractive career path should be designed for each job role aligned with education and professional certifications, the workstation and the tools used should be top notch and diversity amongst employees should be celebrated (Ventrice, 2009). Furthermore the job roles where customer interaction is minimal should be allowed to wear casual clothes along with comfortable seats, personalized workspace and workstations. The practice of employee or team of the month should be followed by an outbreak where a company sponsored dinner / lunch should be given to the winning team or family of the individual. This can be executed by human resources by purchased coupons from restaurants and food outlets (Ventrice, 2009). Communication Strategy The rewards program would fail to deliver if an appropriate communication strategy is not adopted by the bank’s human resources department along with its leadership team. In order to effectively inform employees of the enhanced package after implementation of total rewards strategy and avoid raising suspicion, fear or confusion from employees; it is important that a communication strategy is devised that should start a quarter before the actual implementation (Armstrong & Brown, 2006). The first phase should include a soft introduction session given to line managers by the leadership team and the benefits to be introduced should be shared with them while taking their feedback. This should give human resources much to ponder upon and revise certain initiatives on the drawing board. The second phase should be a longer session with team leaders and line managers with detailed policies shared with them along with policy workflow, their own responsibility and a tentative timeline. After the second phase the human resources should get employee friendly posters designed, these posters should be sent to each line manager for their branch or department. It is imperative that the posters must be friendly and should emphasize on the benefits of total rewards, since line managers know about the benefits employees can share their concerns with them and recommendations should be routed to human resources using a toll free number or a global email address. As the time of implementation gets closer a grand ceremony should be arranged where all the employees are present in the arena and regional employees are connected through video conferencing. In this session the human resource lead should present a case study of an employee and share all the enhanced benefits and related policies. A Q&A session is vital and each concern should be addressed in that particular session, and on the date of launch all employees should receive a revised electronic appointment letter having all the new benefits and a total sum of financial benefits and non financial benefits along with revised and summarized policies of training and development opportunities and workplace environment. No matter how well the awareness campaign is planned, the role of line managers is most important in making the total rewards plan a success, hence it is important to take each line manager in confidence and explain the overall increased benefits to them along with the reasons for change. Discouraging the Entitlement Mentality With the ever increasing cost of living, deteriorating global economy and increased inflation, employees cannot be blamed for having an entitlement mentality. There expectation of a steady yearly pay raise every year is justified until the increments are not linked with performance exhibited by them according to their job descriptions or an extraordinary contribution made (Watson, 2010). In this regard, I would recommend that we decentralize the performance management system and discontinue the annual increment policy applied equally. The new system should be based on a monthly evaluation policy where the supervisor shall recommend a portion of his team mates as performers (25 percent of team) and contributors (25 percent of team) along with those (50 percent of team) who were average and below average in their performance. It is important that individual contributions should contribute somehow to the departmental and organizational objectives hence human resources should monitor the evaluation feedbacks submitted by the supervisor with inconsistencies highlighted to the supervisor. Enhanced increments should be given to excellent performers based on a cumulative six monthly report, with normal increments given to good performers and minimum or no increments given to the average and below average performers. In order to remove bias human resources should play an active role in handling employee grievances and discrepancies in assigned targets against achieved results. The whole organization should change its mentality and such a change shall only come after a certain period of time. When promoting employees it is important that regardless of gender, age or tenure with the bank, promotions should be made on performance and merit considering contribution of employee in relation to executing his own job, learning and education acquired and additional tasks and responsibilities executed. Rewards Arrangement and Flexibility between divisions In every organization there are departments, who contribute directly to the earned revenue such as sales, customer services, finance and marketing; with less importance given to support departments such as human resources, legal, administration and public relations. It is recommended that all non financial benefits should be distributed on equal grounds with an exception of monetary commissions given to direct contributors (Armstrong & Brown, 2006). In order to balance both divisions support departments should be given an additional incentive of working from home up to a maximum of one day per week. It is imperative that employees of support staff remain available through technology provided by the bank and by use of personal cell phones. Responsibility and readiness of Line Managers The bank prides itself of developing friendly and efficient line managers and much success depends on their role in times ahead and recently witnessed susceptible economic conditions. In developing and adopting a total rewards policy, the role of line manager is ever so important in endowing trust to the subordinates and ensuring readiness of their departments while addressing concerns of individual employees. Since approvals related to work environment and flexibility in work schedules have been decentralized, it is imperative that the line managers understand their enhanced roles and support the employees to an acceptable extent while keeping in mind the business and departmental objectives (Armstrong, 2010). Sequence or Timeline for implementation of a total rewards Strategy Change Management Adopting a total rewards approach for 6,000 employees placed in different countries with 1,700 remote locations can be a daunting and challenging task. The change management process in this particular activity must start with understanding the reasons behind the initiative and the concrete strategy backed by vision of the bank along with the resulting financial commitments with utilization of other resources such as increased head count and time spent. The change management team should not only comprise of leadership and human resources department but should also include leaders from different regions that can manage the expectation of the employees and communicate and convince the employees to trust the process. Each query from employee should be recorded and a knowledge base should be maintained that can provide instant help to employees and change champions alike. Total Reward Framework An integrated approach towards total rewards framework shall be based on Towers Perrin model, since non-financial rewards cannot be quantitatively presented in front of each employee, hence it should be made part of the employee package in company policy and in appointment related documents. For example an employee handbook should provide information to the employees about the brief policies related to the non-financial benefits. Other mediums such as employee portals, DVDs and bank website can introduce and spread awareness about the non-monetary benefits. In order to introduce each non-financial benefit, total reward statements pertaining to each benefit should be introduced and promoted within the organization (Rowley, 2009). The financial aspect or the budget borne by the company should include each and every aspect of financial and non-financial benefits coming out of this initiative. After the financial calculations a fair reflection shall be given to employees highlighting the actual financial and non financial benefits the bank is providing to them as the portion of their gross salaries for example; our total rewards approach provides our employees with non-financial benefits that are up to 2.5 times their actual gross salaries per month. In this way the bank would be able to make a quantitative statement while increasing the value of non-financial benefits amongst the workforce. Furthermore it is important that each element of total rewards approach should have its own policy guidelines but in order to increase curiosity and value, a group of non-financial benefits can be labeled together for example, Lifestyle Package can include club memberships, leave fare assistance, working from home and outbreaks while learning and development package can include career progression, training programs, coaching sessions and succession planning. References Armstrong, M & Brown, D. 2006, ‘Strategic Reward: Making It Happen’ , Kogan Page Publishers. Armstrong, M. 2010, ‘Armstrong’s Handbook of Human Resource Management Practice’, Kogan Page. Blancharrd, K. & Blanchard, S. 2011, ‘The Role Money Plays in Engaging Employees’, Viewed 29 November 2012, < http://www.fastcompany.com/1747509/role-money-plays-engaging-employees>. Berger, L & Berger, D. 2008, ‘The Compensation Handbook 2008’, McGraw-Hill. Hay Group. 2001, ‘Engage Employees and boost Performance’, Viewed 29 November 2012 James, J. 2008, ‘10 non-monetary benefits to attract and retain top developers’, Viewed 29 November 2012 Manas, TM, Graham, MD. 2002, ‘Creating a Total Rewards Strategy: A Toolkit for Designing Business-Based Plans’. AMACOM Meyers, J. 2010, ‘How Does a Contingent Payment Work?’, Viewed 29 November 2012 Rowley, D. 2009, ‘Total reward statements: debate’, Viewed 29 November 2012 Thompson, S. 2012, ‘The Importance of Non-financial Rewards for the Organization’, Viewed 29 November 2012 Ventrice, C. 2009, ‘Make Their Day! Employee Recognition That Works’, Koehler Publishers Watson, T. 2010,‘The New Employment Deal: How Far, How Fast and How Enduring Insights’, Viewed 29 November 2012, Read More