What is your assessment of the return on the dollars that are being spent through current compensation and benefit programs to attract, retain, and motivate your employees, your executive team, and yourself? If you do not know the answer to that question, you may be losing valuable time in making updates in program design and administration to improve the return on your company’s talent expense for 2019. As with any goal, you need to know where you are in order to decide on the path to where you want to be. The following are steps that we have taken with organizations of diverse sizes and business sectors to perfect the benefit from their total reward investment in influencing employee behavior to support business objectives. Whether these steps are major studies or quick assessments will depend on individual organization needs and the time available before having to roll-out the program.
1. What is the status of your total rewards program? You will need to evaluate the status from the perspective of regulatory compliance, employee reaction, alignment with company goals, and competitive position.
2. Where do you want to position your program given your cost constraints? You can attract, retain, and motivate with compensation and benefit programs that have very different designs and cost. Who you need to hire to make your organization successful will be a major determinant of program design and expense.
3. What is the “gap” between current program status and the desired state? This may be a multi-year plan. This may also involve revising the company’s philosophy to better align with business reality. For example, do you really need to offer a total rewards program that delivers compensation and benefits at the 75th percentile to get the talent needed for all positions?
“Your approach to setting a total rewards program review for your organization is the key to deciding whether the program is a necessary administrative headache or a powerful tool to maximize your business success.”
4. What are the choices for the total rewards program in your organization? For example, a private company will not have publicly traded stock as a long-term incentive. A very small company may find the deferral opportunities of a defined benefit pension plan attractive even though it is considered too much liability for a larger company. A non-profit may want to emphasize the intrinsic value of the mission and give more flexible working arrangements due to limitations on incentive pay.
5. What are the program implementation requirements? The value of your total rewards program is heavily linked to excellence in delivery.
6. What are the communication needs? Remuneration value is in the eye of the recipient. Know your work force in terms of what they value. We have seen too many leaders believe that the program is excellent only to have employees unhappy with the programs used to deliver their remuneration dollars.
We are already working with clients to set up their project plan to carry out the above steps within the constraints of Finance Department due dates for the 2019 budget, system lead times to support administrative updates, and board meeting schedules for plan approvals. Your approach to setting a total rewards program review for your organization is the key to deciding whether the program is a necessary administrative headache or a powerful tool to maximize your business success.