Total Rewards System Proposal - Research Paper Example

? Total Rewards System Proposal Number Introduction The need to make total rewards system a salient factor in organizational planning and management is paramount, if stability, continuity and success. This is because, total rewards system is the backbone that holds an organization together by injecting important principles such as coherence, fairness, diligence and motivation, commitment, and teamwork into an organization's life. Total rewards system is an integral part of organizational existence, growth and success because its relevance touches on employees' welfare, yet employees are the heart, sinews, mind and blood vessels of an organization. Employees are the organization, and a notion arguing contrariwise suggests a mere office building and its infrastructure as an organization. The banking sector provides an ideal service-based industry that heavily relies on total rewards system, as shall be seen in the ensuing discussion. Introduction The banking sector is a service-based industry which consists of financial institutions and financial intermediaries which accept deposits and channel these deposits into lending activities, by either directly by loaning, or indirectly, through the engagements of capital markets. Because of the sensitivity of security, legal and financial issues that surround banking, it is important that competence and professionalism are upheld to the highest standards possible. Likewise, the best way of ensuring the maintenance of competence and professionalism in a banking organization is by observing an effective total rewards system. Just as Holbeche (2013) divulges, owing to the large scope of operations that a banking organization indulges in, the sales and marketing department serves as the best candidate for this study, as the sales and marketing department is certainly the most rigorous yet one of the most important parts of a banking institution. Therefore, underperformance in a bank's sales and marketing department spells doom for the bank's growth and expansion in the market. In turn, underperformance can best be corrected through the application of an effective service-based industry. The bank chosen is a fictitious entity having 20,000 employees and 16 other branches that are spread out in the international market (and this giving the bank 17 branches, if the mother company in the US is counted). This bank is called Pearson & Hardman. Interestingly, there are 2,000 management-level individuals who speak a variety of languages. 1. Creating a Brief Overview of the Company Requirements for a Total Rewards System Like any other company, Pearson & Hardman's requirements for a total rewards system are: set qualifications that an employee must meet; set performance target for every employee, unit, department and branch; a fully functioning, above-board and transparent human resources (HR) management; a pool of resources from whence Pearson & Hardman should find the financial and logistical wherewithal to reward outstanding or favorable talent; communication and effective communication infrastructure; and knowledge of labor laws (even international labor laws since Pearson & Hardman is multinational); and training and development programs. Just as Armstrong and Brown (2006) posit, a fully functioning and competent HR system will for instance help Pearson & Hardman do effective and progressive evaluations. The same will also help Pearson & Hardman understand what the law says about terms and conditions of employment such as the age of retirement, the minimum wage, health benefits and sabbaticals that should be accorded to employees. 2. Formulating a Total Rewards Strategy to Encompass the Fundamentals of Compensation and the Regulatory Environments The 2,000 management-level individuals who speak a variety of languages are to be heads of the 16 other branches that are to be opened. This is done by matching a particular management-level individual with the first or official language in an individual country (among the 16 countries). Since such employees (2,000 employees) outnumber the countries of target, it will be important that a total rewards strategy is used to fill the competitive portfolios. Going by the recommendation of HR strategists such as Jensen and Stark (2004), to the effect of the above, ascendance into an office will be based on merit (academic performance and qualifications, general experience, communication and interpersonal skills and passion for banking [this being seen in the extent to which the candidate has engaged in banking, in his/ her own volition]) and experience in Pearson & Hardman. As for experience, the performance of an individual management-level employee is to be gauged on tenure at Pearson & Hardman, supervisor's report and that employee's performance track record. The proposition above is to be complemented with every management-level employee who has been promoted to head a foreign market having his remunerations being adjusted upwards, to match the newly acquired offices and their responsibilities. The same should apply to perks. The other employees who will not have attained the senior-most offices are to accompany the newly designated heads as their deputies and members of the junior staff, with ascendance to office still being realized through merit and ethno-linguistic conformance to the new market. 3. Advantages of the Total Rewards Strategy Being Proposed The advantages of the total rewards strategy being proposed for Pearson & Hardman Bank are far-reaching. This is because; the total rewards strategy encompasses the extension of compensation, benefits and work-life experience (acts of acknowledgement, culture, environment, development and culture). This comprehensive approach is bound to increase and consolidate: motivation among employees (because of competitive compensation programs); intra-organizational cohesion and the spirit of teamwork (through the accordance of positive work-life experience such as the provision of favorable environment, development and culture); perennially invigorated personnel (through the observation of competitive recruitment programs and fair exit or retirement procedure); a culture of consistently attaining performance gaps (because of the observation of merit, during the recruitment of highly skilled personnel and the accordance of other benefits such as healthcare services benefits and paid sabbaticals to Pearson & Hardman Bank employees); and positive public relations. Positive relations come into play herein, since the observation of the comprehensive model is bound to produce satisfied and all-round employees (Heneman, 2003). There is no instrument of public relations greater than an HRM program that satisfactorily involves the welfare and development of its employees (Botin, 2009). All these components of the total rewards strategy being proposed for Pearson & Hardman Bank will help further its employees’ needs. 4. Communication Components According to Armstrong (2010), the key communication components of the total rewards system are: the actual plan or information being communicated; proper communication strategy; the right amount of communication; and the media and channels of communication. The actual plan includes the measures that the firm will have put down to reward desirable talents and skills, in terms of compensation (base pay, merit pay and equity based rewards), benefits (health plans, insurance, paid time-offs and employee assistance programs), work experience (performance jobs appraisals, work-life balance programs and career growth training programs and initiatives) and culture and environment (financial impacts, company strategy, employee interests and expectations and clients' expectations). All these are to be effectively and continuously communicated so that Pearson & Hardman's rank and file can be aware. The method of communication that is most favorable for the same are company periodicals and websites. Employees can be given Pearson & Hardman periodicals to peruse at their free time, for instance. 5. Indicating Pearson & Hardman's Strategy for Devising a Competitive Pay Structure The competitive pay structure is to be strictly based on merit. This is to the effect that ascent to an office is to be in accordance with educational background, experience and skills. In turn, the pay structure is to be commensurate with the office that a particular individual will have occupied. This is because the duties, responsibilities, roles and powers that are attributed to an individual management-level individual will be specific to a given topic. For instance, an individual management-level employee heading a certain market will have to be paid above his lieutenants who work with him (Thompson and CIPD, 2002). Thus, the suggestion by Graham and Manas (2003) to the effect that the higher an office is to be within the ranks of Pearson & Hardman, the higher the pay structures are to be, applies. Because of this, the base pay, equity-based rewards and merit pay are to be issued according to the position that every individual management-level employee will occupy in the firm. The same case applies to benefits (health plans and executive benefits), work experience (work-life initiatives, performance management and training and career growth programs) are to be accorded according to merit. Nevertheless, promotion needs not come through years of labor, since display of outstanding skills and talents are recognized, rewarded and sharpened. References Armstrong, M. & Brown, D. (2006). Strategic Reward: Making it Happen. London/ NY: Kogal Page Limited. Armstrong, M. (2010). Evidence-Based Reward Management: Creating Measurable Business Impact from Your Pay and Reward Practices. London/ NY: Kogal Page Limited. Botin, J. A. (2009). Sustainable Management of Mining Operations. Littleton: SME Inc. Graham, D. M. & Manas, T. M. (2003). Creating a Total Rewards Strategy: A Toolkit for Designing Business-Based Plans. NY: McGraw Hill. Heneman, L. R. (2003). Strategic Reward Management Design, Implementation and Evaluation. NY: Information Age Publishing Inc. Holbeche, L. (2013). Aligning Human Resources and Business Strategy. Oxford: Butterworth- Heinemann. Jensen, D. & Stark, M. (2004). A Manager's Guide to Rewards: What You Need to Know. NY: AMACOM/ Hay Group Inc. Thompson, P. & CIPD. (2002). Total Reward. New York/ London: Chartered Institute of Personnel and Development. Read More