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5 Steps to designing a total reward approach for your business

Kim Lombard
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This is part three in a three-part series

In the last two parts of this series, I introduced the concept of a 'total reward approach' and gave examples of how this can be implemented in a business. In this final instalment, I give you five practical steps towards implementing a total reward approach in your business.

1. Understand the current business and reward environment

It's essential to understand the current business and reward environment if you want to balance the needs and wants of all stakeholders. You need to understand what's possible - in terms of affordability, competitiveness and the current reward situation - to define a reward philosophy that you can commit to and which balances most needs and wants. Authenticity is key in defining, and committing to, this reward philosophy as it should stand the test of time as well as allow you to attract, motivate and retain your key skills.

2. Define the market and your comparative point

Understand and define the market which you attract your skills from and lose your employees to. Secure market data in this industry so that you can define a comparative point around which to develop pay practices so that you can create remuneration structures within which to manage pay appropriately. Your reward philosophy will help and guide the design of these remuneration structures as well as the decisions on appropriate variable pay programmes for the business.

3. Understand your culture and employees

Understand your organisational culture and your employees to see what's working and what isn't. Be warned, though, that if you run a climate or engagement survey, it's imperative to act on the results and make visible changes so that employees can gain confidence in the process of collecting information and participate freely in these processes in the future. Your employees must understand that they won't be persecuted for giving their honest opinions and views.

Surveys are a valuable tool for understanding what you need to preserve and what you need to fix – aligned to your overall reward philosophy - and what you can commit to.

4. Define and create an employee value proposition

Having a holistic and total approach to rewards isn't enough. Your employees need to be aware of the total rewards offering and what is in it for them. Understanding everything of value that your organisation can offer its employees is critical. 'Packaging' and communicating this to your employees is even more important. The employee value proposition (EVP) is what initially attracts the employee to work at an organisation, and an effective EVP is often the reason why employees stay with an organisation and what engages them.

An EVP should include all elements of value that the company can offer the employee - even the intangible elements. It has also been defined as 'the mission and attributes associated with working at an organisation that make the work experience superior to that of other organisations'.

A comprehensive EVP also communicates to the market what's important at the organisation and what employees receive in return for working there.

A very useful tool in being able to capture this EVP for employees is through a total reward statement. This is an individual statement and is personalised to the specific rewards that the employee receives. It incorporates both financial and non-financial elements of reward.

5. Communicate, communicate, communicate

It's absolutely critical that all employees understand where the organisation is going, how they can contribute to the success of that journey, what they will receive in return and how the various parties and practices come together to support those involved. One can never underestimate the importance of educating and communicating with staff so that everyone has an understanding of the above.

People want to belong to something, know that they're adding value and that they're receiving a fair return on the effort they expend. Hiding certain information, not celebrating successes, assuming people know and understand things is a sure way to ensure that your employees disconnect and seek other places where their needs and wants can be better met.

I'm not proposing a 'tell-all' style of communicating as there are most certainly some areas of information that are bound by specific confidentiality and business rules, however don't assume that employees would rather not know. It's best to over communicate and let them choose.


Kim Lombard is a co-owner of Synntech People Solutions and is an experienced HR and reward consultant. She holds degrees in industrial and clinical psychology and is a certified Global Reward Professional. Kim has over 18 years' experience across a broad range of business functions within both local and international organisations in the banking, project engineering, construction, manufacturing and human capital industries. Kim has experience in all aspects of the HR, remuneration and reward environment concerning the creation of reward philosophies and strategies, employee value propositions, sales commission schemes, cost-to-company conversions, pay scale development, market positioning, HR business support, creation of HR policies and structure, recruitment as well as people development.



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