Friday, February 25, 2011
For several decades American organizations have utilized numerous methods for rewarding and recognizing employees in efforts to attract, retain, and motivate those employees. Those efforts and methods have included fixed as well as variable forms of compensation, benefit, retirement, and stock ownership plans. While individual organizations perceive they have met with some degree of success, many continue to search out alternative methods in hopes of achieving some balance between the needs of the employee vs. the needs of the organization.
According the “WorldatWork” (a.k.a. American Compensation Association), Total Employee Rewards are made up of all of the tools an organization has at its disposal to attract, retain, and motivate employees.
This includes:
- Cash compensation - wages, commissions, bonuses, incentives.Health and welfare benefits - health care, life, disability,.Retirement - pension, 401(k)/403(b)/457.Stock plans - ESOP, ESPP, stock incentives.Miscellaneous- paid & unpaid time off, discounts, development/educational/training opportunities, … etc.
Total Employee Rewards also includes the cultural and environmental aspects of an organization. Is the organization a place where employees want to work, are engaged in the success and growth of the organization, and are respected by their management? Does the organization permit personal and professional development? Some organizations allow employees to develop and own patents for products the employees have created or at least purchase these patents at a reasonable market value.
Organizations as diverse as John Deere, State Farm, Symantec, and Timken have embraced the concept of Total Rewards. Why would such organization under take to adopt a philosophy that is simple yet complex and has the ability to take on almost any desired configuration? Maybe because Total Rewards is a way to look beyond just the dollars and cents of hiring and paying for just another worker bee. To some extent Total Rewards allows employees to have a degree over control of what motivates them to get up and come to work every day. There is something different in Total Rewards for every employee. For some it may be doing new and interesting work, for others having a degree of security, for another it is being allowed to develop new and innovative products.
In an era of no worker or employer commitment, is it possible that organization have the ability to retain their top talent? Of course it is. A big salary increase is only good for a short time. And when there is always another employer who is willing to pay more it becomes bidding game and in terms of retaining talent, this is a zero sum game.
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