Six Features of an Effective Total Rewards Program - Essay Example

Six Features of an Effective Total Rewards Program Organizational success is strongly influenced by the employees and the motivation rewarding programs. A reward program addresses and recognizes needs of the sales force and enhances their productivity and attitudes. It encourages them to attain high performance level and achieve sales goal of the organization more effectively. Such positive measures boost employee morale motivating them to cater to a large number of clients (Malik, Butt & Choi, 2014). Employee benefits can improve retention of the sales force and increase the feeling of economic security. The best way to gain profits and achieve commercial success is through employee compensation both in cash and kind. The cash benefits include wages and salary, while benefits in kind include fringe benefits and perquisites. The employee rewarding programs are critical to success of the organizations in recent times. Tesco PLC, the British multinational (MNC) grocery and merchandise retailer, is well-known for the compensation plan offered to its sales force (Armstrong & Taylor, 2014). The company provides simple, competitive and sustainable rewards to the staff, which help to build loyalty and trust amongst the employees and ensure their retention. The staff is paid quite high and the amount is around 7% more than three largest food retailers present in the market. a. Six features of an effective total rewards program Total reward program is a part of the sales force compensation plan. Many companies effectively conduct these programs so as to build loyalty and trust amongst employees. Six features of an effective total rewards program can be described as follows: Strong Compensation structure- The sales force can be motivated through premium and variable pay, besides the base salary. Premium pays can be in the form of on-call, shift differential, call-in, hazard, bi-lingual and skill based pay (Tetrick & Haimann, 2014). Variable pay, on the other hand, can be offered as commission, team based pay, bonus programs and incentive pay. Incentives increase the feeling of self-actualization among employees. Top IT companies such as, IBM, offers employees undifferentiated variable and team based pay, thereby accelerating their level of morale and encouraging them to work for the organizational welfare (Armstrong & Taylor, 2014). Availability of Perquisites – These have the capacity to elevate the motivation level of sales force. The basic perquisites like, rent free accommodation, conveyance allowance, educational allowance and medical facility, can urge the sales force to join a company, lower the rate of turnovers and increase their loyalty (Dixon, Hayes & Stack, 2004). Availability of basic Insurance facilities – Medical and health insurance facilities for the employees and their families and group insurance should form a vital part of the employee reward structure. This measure can satisfy safety needs of the employees (Humayun, et al., 2014). Retirement Benefits – The reward program of companies should give due importance to the retirement benefits of the employees, which can enhance their feeling of old age security (Dixon, Hayes & Stack, 2004). Financial support – The employees must be supported by the employers financially in the form of company loans that are payable at low rates of interest. It should be a part of the total rewards program. Promotions - This is the recognition for the work done by employees. If the sales force is allowed promotions based on quality of the work done, then their levels of motivation and contribution towards the company can increase (Gupta & Shaw, 2014). Hence, promotions should be included in the total rewards program of each and every company. The new employees should attain a certain level of performance in order to enjoy advantages of the reward systems provided by companies. In this manner, any company can reduce its costs of rewards given to the new employees and utilize the same for facilitating welfare of the senior employees. The company should also attract new sales force through high basic pay packets. These are the few vital features that a robust reward program should possess (Malik, Butt & Choi, 2014). b. Compensation plan and behavior of sales force Sales forces that are targeted with the compensation plans feel more motivated towards the company. The recognition and reward given for their work is able to increase their loyalty towards the company, thereby urging them to attract more customers and increase the level of sales. They show more productivity and flexibility (Armstrong & Taylor, 2014). Thus, every compensation plan should include proper payment of incentives, right promotions and other such benefits so that there are least number of turnovers and high employee performance (Malik, A.R., Butt & Choi, 2014). Besides that, the perquisites and benefits can easily satisfy safety, security, belongingness and self-actualization needs of employees. Formation of an appropriate compensation plan can enable the companies to utilize employees in their own stride and benefit extensively (Gupta & Shaw, 2014). c. Achievement of value proposition The value proposition can be defined as the value promised to be acknowledged and delivered to the employees and their faith towards the company to experience the same. It is a business strategy. Any company can achieve value proposition by providing the basic rewards as described in the program above. If companies provide these compensations effectively, then it can lead to fulfillment of the value proposition (Tetrick & Haimann, 2014). d. Acceptance of the plan by future sales force This plan can attract the future sales person towards any company who adapts the same. It fulfills the basic human needs related to security, safety, belongingness and self-actualization (Gupta & Shaw, 2014). The plan is a reflection of the basic rewards that every compensation plan should incorporate in order to retain employees and increase their loyalty towards the company. Besides that, new sales force will be motivated to join a company that provides a high pay margin than that of the competitors. Such a measure is preferred over offering compensation benefits to fresh recruits at the beginning of their career. Tesco PLC is another top company who follows this proposition (Tetrick & Haimann, 2014). References Armstrong, M., & Taylor, S. (2014). Armstrong's handbook of human resource management practice. Kogan Page Publishers. Dixon, M. R., Hayes, L. J., & Stack, J. (2004). Changing conceptions of employee compensation. Journal of Organizational Behavior Management, 23(2-3), 95-116. Gupta, N., & Shaw, J. D. (2014). Employee compensation: The neglected area of HRM research. Human Resource Management Review, 24(1), 1-4. Humayun, F., Zaheer, A., Basit, A., & Akber, S. (2014). Job Satisfaction of Employees in Banking Sector. European Journal of Business and Management, 6(17), 178-185. Malik, M. A. R., Butt, A. N., & Choi, J. N. (2014). Rewards and employee creative performance: Moderating effects of creative self‐efficacy, reward importance, and locus of control. Journal of Organizational Behavior. Tetrick, L. E., & Haimann, C. R. (2014). Employee Recognition. Workplace Well-being: How to Build Psychologically Healthy Workplaces, 161. Read More