Archived Insight | September 5, 2018
The relationship between employer and employee consists of give and take — you have certain expectations for how each employee will help the organization achieve success and they have an expectation to get compensated for their effort.
But the rewards you can offer your people extend far beyond a paycheck. The total rewards strategies you use at your organization can both attract new, talented people and keep your best employees with you for the long haul. Our team has decades of experience helping a variety of clients craft the right total rewards strategies to help them stand out from the competition.
The cornerstone of our total rewards strategy is the Employee Value Exchange (EVE), which examines the balance between the rewards that employers offer and the expectations they set in exchange for those rewards. In our Rewards of Work model, we identify five types of rewards:
We use proprietary research conducted through years of study to help clients understand how to best craft their own value exchange, the preferences of their staff and the causes of any gaps between employee and/or organization aspirations and the actual exchange presented.
Below you'll find just one example of how our performance and rewards practice approaches total rewards redesign, providing the client with significant compensation cost savings over the long term.
A mid-range diesel engine manufacturer needed to redesign its total rewards system for hourly manufacturing associates. This company is state-of-the-art, with a work culture heavily influenced by a team-based work system.
The company’s future vision includes a facility expansion, new production lines, new products and increased volumes, concurrent with improvements in quality and efficiency and an overall reduction in cost per engine.
The pressures resulting from a high-performance work environment and an aggressive vision for the future underscored the need to improve the effectiveness, perceived fairness and competitiveness of the company’s reward systems.
After conducting an in-depth needs assessment of its total reward system, the company decided to use a high-involvement process in redesigning its plant goal-sharing system for its exempt and hourly employees and its performance management and base-pay systems for its hourly employees.
A steering committee comprised of senior managers was formed to develop a total rewards philosophy and to guide the redesign process. Planning teams of hourly and salaried employees were chartered to plan employee conferences where more than 150 employees developed ideas for redesigning the company’s reward system. In the end, close to half of the company’s 700 employees were involved directly in the change.
The steering committee and the company’s corporate parent finalized and approved the following changes:
The company achieved the following results with its reward system changes:
This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.
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