Assignment 5– New and Improved Rewards at Work
The purpose of this paper is to determine how innovations in employee benefits can improve the overall competitive compensation strategy of the organization. Then, it explains how innovative benefits could be tied to specific jobs. After that, it critiques the effectiveness of equity-based rewards systems versus those with more creative approaches and discusses the key elements of integrating innovation into a traditional total rewards program. And last, it recommends a process that optimizes an employee-based suggestion program to continually refresh the total rewards of the organization.
1. Determine how innovations in employee benefits can improve the overall competitive compensation strategy of the organization.
In this century, every dimension of life changes so fast. In unison, the way of companies doing business, personal lives of employees and employers, and working environments change, too. To stay in the business, companies need to comply with these changes. Employees have changeable needs and companies need to make employees keep working with their comprehensive benefits. They must find innovative ways of engaging employees that encourage and support their commitment and improve their performance. Otherwise they will be out of the race.
The innovations in employee benefits can improve the overall competitive compensation strategy of the organization tremendously in a positive manner due to the employee benefits strategy directly contributes to the success of an organization by attracting and retaining good employees.
The benefits offered by an organization are an extremely important part of the puzzle in order for an organization to retain their top talent and for the organization to be competitive in the job market and the success of the organization.
Also, in this century, in workplaces the diversity of workforce increases. Companies must understand and address the diverse needs of their workforce to survive, thrive, and stay competitive. For example, the dramatic increase on women in the workforce, resulting in the rise of the dual focus worker- workers focused on work and family, rather than on work or family- and the aging of the workforce are among the most critical factors shaping today’s workplace and affecting the way people live and work.
Innovative benefits become a big issue for employees. During the recruitment process, new employees want to learn about innovative benefits of the company to see if they will manage both their work and personal lives. Also lack of these benefits may cause losing of that employee. These benefits impact the way employees feel about their work in a either good or bad way. So companies must create innovative benefits for their employees. Otherwise they can lose their competitive advantage.
There are a few benefits that employees will expect as standard. These benefits are usually seen as priority and can include pensions, medical, dental and life insurance and. Aside from priority benefits a number of companies need to add extra enticements. These employee benefits can include discretionary bonuses, performance related bonuses, profit sharing, gym memberships. Employers who then go the extra mile above standard employee benefits packages may be looking at some extra loyal employees. Innovative employee benefits are not the normal or standard benefits. They can sometimes be seen as unusual but can actually be very worthwhile. Examples of innovative benefits can include:
* Flexible working hours for employees
* Childcare centers
* Benefits that include use by members of the employee’s family
* Subsidized meals at staff canteens
* Certain companies do offer subsidized housing to employees
* Telecommuting and working from home options
* Certain companies do offer use of company accommodation at holiday centers.
Innovations in employee benefits can improve the overall competitive compensation strategy of the organization because it is helpful to
* attract and retain talented people
* raise morale and job satisfaction
* increase productivity
* increase commitment and engagement
* reduce health care cost
* combat burnout
* attract investors
* be a good corporate citizen.
It is known by employers that to attract the best employees and to keep them, they need to offer something that competitors do not. Innovative employee benefits are one way of beating the competition when it comes to attracting the best candidates for the job. Competition for first rate professionals can be fierce and in many cases an excellent salary just isn’t enough. Employers who go above and beyond the run of the mill employee benefits can attract employees and keep them for longer which is a key of successful and competitive business.
2. Explain how innovative benefits could be tied to specific jobs.
Studies show that tailored benefits plans can increase employees’ satisfaction with the company. It can only happen if the plan has a meaning for an employee. For example, retirement benefits and health care are less important to workers in their 20s, but become increasingly important as employees age.
Innovative benefits can really be used by employers for specific jobs. For example, in a unit of the company, if the employees have to work on computer a lot, the company can provide them with more comprehensive vision insurance. If , in the another unit of the company, employees work around the table a lot and don’t move within the working hours, the company can provide them with gym memberships. In another unit, if the shift starts too early or it finishes too late, the company can provide the employees with employee buses.
3. Critique the effectiveness of equity-based rewards systems versus those with more creative approaches.
Equity based rewards are what an employee receives in their bank account: base wage/salary, overtime, commission, merit pay, paid leave, bonuses, company profit-sharing. The other innovative benefits refer to that part of the total reward package in addition to direct pay such as health & life insurance cover, retirement and pension plans, company car, health care, health club memberships, mobile phone, subsidized meals, subsidized entertainment (movies, opera, museums, etc).
Employers use equity based rewards to inspire their employees to reach new heights of performance. Equity based rewards systems include stock options, stock awards, stock alternatives, employee stock purchase plan, defined contribution plan, employee stock ownership plan, 401(k) plans. Equity-based compensation rewards collaborative efforts and aligns the interests of companies, shareholders, and employees. With equity based rewards companies build motivation, conserve resources like cash, getting tax advantages, attract, motivate, and retain employees.
The more creative approaches are used by employers to supplement the cash compensation that employees receive. While they let cost saving for the employers, they create commitment within employees to the company. These creative benefits let employee live their life, spend their time with their families, loved ones. Also shows employees that the company cares for them.
Both of these rewards aim to create employee commitment, motivation, attract and retain talented employees, decrease turnout. Using of one or another just depends on the company’s business strategy, its mission and vision. I think both of them are pretty effective with correct communication strategy. Also the effectiveness depends on the employees, too. For example, some employees care a lot about their family life while some really care more about money.
4. Discuss the key elements of integrating innovation into a traditional total rewards program.
Lots of research has shown that employee engagement is critical to business performance. Traditional total rewards programs don’t drive employee engagement. Innovative benefits should provide employees with intangible rewards to satisfy employees. Satisfied employees are more productive than unhappy employees, and modern organizations must realize that it takes more than just money to make an employee truly happy.
Salaries and health benefits are the sole components of traditional pay systems, and they must be included in any total rewards system as well. In addition to offering competitive base salaries and flexible pay options, companies should offer their employees’ flexible, customizable benefit plans to fit their individual needs. For example, at Google, employees might bring their dogs to work or they can play pool at work with pool tables in the lobbies. These benefits are the unique and proprietary way of attracting, retaining and motivating employees.
Innovative benefits programs can be integrated into a traditional total rewards programs with programs, policies and benefits, and practices. Programs can include adoption assistance, career planning, pagers for expectant fathers, and peer support groups while policies and benefits may include flexible work arrangements, family sick days, and group insurance policies for life, home, car. And practices goes in unison with the corporate culture which is unique.
5. Recommend a process that optimizes an employee-based suggestion program to continually refresh the total rewards of the organization.
I would recommend a process that optimizes an employee-based suggestion program to continually refresh the total rewards of the organization would be to focus on the business market in which would offer significant growth opportunities, recurring revenues, and the chance to be the organization leader. The process would include technology change to enhance products and services offered.
The process that would attract and retain motivated, talented people who are committed to the organization aspirations and who help us win in the marketplaces. The process would be to add value to our customers by making available a broad range of mission-critical, cost-effective, computerized transaction processing and information services to selected markets on a global basis. The process would include the below:
· Be committed to providing world class service
· Outstanding employees which would be the organization key to success
· Be committed to product leadership
· Seek to achieve and maintain market-share leadership
· Commit to maintain a high level of financial and corporate controls
Watson (2012) suggest the below process to optimize an employee-based suggestion program to continually refresh the total rewards of the organization:
· Begin with a fundamental shift in philosophy; treat your workforce programs as a portfolio of integrated investments with different yet complementary purpose and desired outcomes.
· Accurately determine and size your total investment in a workforce program to ensure its inline with financial realities and business needs.
· Create a frame work that adapts quickly efficiently to changes in the business strategy and workforce composition over time and across countries, employee segments or business divisions.
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