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Improved Rewards at Work

Improved Rewards at Work

New and Improved Rewards at Work

Employers have been coming up with innovative employee rewards to boost morale and acknowledge employee needs for creativity and personal goal accomplishment. Some of the latest potential employee rewards include using the Internet at work for personal reasons such as shopping, communicating with friends, or personal finances; bringing a pet to work; instituting a controlled napping policy, and the sports and office betting pools.

Determine how innovations in employee benefits can improve the overall competitive compensation strategy of the organization.
Explain how innovative benefits could be tied to specific jobs.
Critique the effectiveness of equity-based rewards systems versus those with more creative approaches.
Discuss the key elements of integrating innovation into a traditional total rewards program.
Recommend a process that optimizes an employee-based suggestion program to continually refresh the total rewards of the organization.

Improved Rewards at Work

Hiring and retaining highly talented and competent employees is becoming difficult. According to the Strategic Benefit survey presented in SHRM, organizations anticipate having highly qualified, experienced, and innovative employees that will aid the organization in achieving its strategic goals (Miller, 2016). This pressure has forced companies to come up with more innovative employee benefits approaches to recruit and retain workers. Employers are strategically using employee benefits as a recruitment and retention tool.

Determine how innovations in employee benefits can improve the overall competitive compensation strategy of the organization.

Innovations in employee benefits aim at improving rewards and compensation to suit people’s interests. The talented and competent employees who are willing to help the organization might look more than financial compensation (Miller, 2016). If that is the case, then it means money alone cannot keep them in the organization. Therefore, a good reward program should not only consider base pay long with commissions or incentives but also innovative employee benefits such as work-life balance, creating a friendly workplace, job security, bonuses, training, recognition, and creating a home-like workplace.

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Innovations in employee benefits increase the company’s compensation competitive advantage, making it a potential target for employees in other companies. Organizations that offer innovative reward and compensation programs are likely to attract highly talented employees (LeitĂŁo, CorrĂȘa, & Lourenço, 2016). Outstanding employee benefits improves the ability of the company to attract and hire new employees. A survey conducted by Aflac (2016) found that 55 percent of the potential employees were willing to accept a job despite the lower pay despite that it was associated with better benefits.  An almost similar survey by MetLife (2018) established that 75 percent of the candidates are likely to accept a job offer if it has flextime benefits, and 61 percent will do so if it has health and wellbeing benefits.

Employees are likely to consider benefits rather than base pay. This means that innovations in employee benefits help workers to address their needs that are not covered in the traditional compensation models. Unique employee benefits comprise specific reward and compensation programs, including performance-based promotions, corporate recognition awards, industry education support, corporate wellness programs, and flexible and collaborative work choices. The comprehensive employee benefits package addresses both work-related and individuals needs of the employee. These packages lead to competitive compensation strategy, increasing the number of potential candidates interested in working in the organizations offering such benefits.

Explain how innovative benefits could be tied to specific jobs.

The basis of tying innovative benefits to specific jobs starts with understanding the nature and design of the job. Organizations usually design jobs to increase productivity by offering rewards to increase job satisfaction and influence personal effort towards meeting the responsibilities associated with a particular job (Grant, 2007). Innovative benefits can be tied to a specific job by allowing employees to showcase their expertise in the job. The HR professional can make an employee understand that they have a leading role in their job. For example, providing the salesperson with the leading opportunity, they will feel that their efforts and accomplishments are recognized and appreciated.

The employees’ benefit can again be tied to a specific job by granting employees responsibilities. The amount of responsibility granted to the employee shows how the HR leaders believe in their capability. An employee can be selected to take a leading role in the job that demands their skills and expertise. By allowing employees to make judgments and decisions without the manager’s involvement increases their credibility that they qualify for the job. This type of benefit will influence employees to improve their performance since they believe that the manager takes their career objectives seriously, and they are likely to get a promotion within the organization.

Gamification is another way through which HR professionals can tie an innovative benefit to a particular job. Employees usually engage in routine tasks that can contribute to boredom—as such, introducing the aspect of gamification in the job will boost the employee’s engagement in the job. The gamification approach is based on the theory that everyone likes games, and people would like a friendly competition that will result in a reward. The workplace-based gamification has been found to increase intrinsic motivation and task performance as presented by (Perryer, Celestine, Scott-Ladd, & Leighton, 2016; Ong, 2013). This innovative benefit, when tied to a job will act as a source of motivation and influence employees to improve their productivity.

Job flexibility motivates employees to attain job satisfaction. The HR management can allow an employee to take a day off if they are exceeded what is expected from them on a particular day. Flexibility plays a leading role in meeting job performance goals, as asserted by (Bran & Udrea, 2016). Flexible work practices should also be considered in terms of hours. For example, if the employee has taken over time in their job to meet the deadline or to complete an urgent task, it would be appropriate to allow them to report the next day by one or two hours late. By doing so, the job will allow the employee to maintain favorable work and life balance. The study by Leslie, Manchester, Park, & Mehng  ( 2012) established that managers appreciate employees’ commitments, and they are likely to support them to attain their career success goals. The employees will feel that they are well-rewarded when their extra efforts are recognized and compensated appropriately.
Critique the effectiveness of equity-based rewards systems versus those with more creative approaches.

Compensating employees with equity is an excellent way of attracting and retaining high talent. Employees become part of the company ownership and are likely to align their goals with those of the shareholders (Robbins, 2004). For example, when this rewarding approach is used for the managers, they are likely to become extra serious with performance because they are aware of compensation through dividends. According to Frye (2004), equity-based programs influence employees to align business financial interests with their goals. It is also a way of offering incentives to the workers while increasing the investment of the company. From the company’s perspective, the worth of the organization increases because employees become dedicated and work hard to attain higher returns in the future.

The equity-based compensation strategy is also beneficial to the organization since when employees are rewarded using stock instead of cash, the company conserves cash that can be used to expand business operations.  The equity-based method is effective for startups, as argued by (Sharkey, 2019). The new businesses are usually cash-strapped, and using this approach will help the company to use the cash to meet other expenses. The equity compensation approach motivates employees indirectly since they view themselves as owners rather than just workers, and as such, they are strongly attached to the company.

Despite the effectiveness of an equity-based reward strategy, it is seen as the way of forcing employees to stay longer in a particular organization. The equity-based approach indirectly treats employees as owners, and this reduces employee turnover. Employees might be discouraged from leaving because when they switch to another organization before the returns are yielded, they will lose. In other words, employees are rewarded for staying, but not to enhance their motivation that will lead to increased productivity and performance (Sharkey, 2019). The equity-based reward might never benefit the employee, especially when the company fails to make profits during the employee stay in the organization. The gain sharing approach would be better than stock option rewards since it focuses on rewarding all members of the organization for improved performance. Although gain sharing rewarding also benefits those who underperformed, it is a creative way of encouraging them to improve their performance.

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Not all employees might be interested in an equity-based reward program, and this leaves a certain segment of the workforce demotivated. The majority of the employees might prefer immediate cash or other benefits after their performance (Akalp, 2015). Employees are uncertain about the benefits of the equity since they are based on future expectations that might never come to pass. Equity rewarding could be detrimental to employees and should be avoided. The supplemental or temporary pay should be embraced more than equity-based rewards. For example, after employees have completed a particular project successfully, they should be rewarded with the supplemental pay. This would be more impactful in influencing the employee’s motivation than waiting for the equity-attached benefits, which are unpredictable.

Equity compensation might lead to boredom, making it ineffective to reward employees. With equity rewarding, job roles, responsibilities, positions, functions, and duties are not considered as areas that could be used to motivate employees. In the ideal workplace context, employees concentrate on improving their performance with the anticipation that they will be recognized and rewarded by the employer. Employees are usually interested in attaining high-performance records to be reward with job promotions and responsibilities that will give them opportunities to showcase their skills and capabilities. The equity-based reward programs do not offer these options, hence making it an employee benefit approach that is ineffective in driving the workers’ performance.

Discuss the key elements of integrating innovation into a traditional total rewards program.

In the modern HR world, organizations are looking at ways to improve the traditional total reward program. The total reward program comprises of the compensation packages that employers are already offering, calling for the need for innovation to include more beneficial rewards. The alternative pay for performance approach is appropriate for improving the traditional total reward program. With the new alternatives, the total reward program will be expanded to include systematic and objective ways of rewarding employees not only based on merit but also on employee’s continuous improvement (Hoole & Hotz, 2016). In integrating innovation into the traditional total rewards program, the HR professional should consider the following elements.

Motivation: Effective for meeting business strategy. This will be achieved by tailoring employee’s performance objectives to their jobs. Employees will be rewarded based on their job performance rather than the entire organization’s performance. By using this approach, it would be easy to measure individual employee performance.

Retention: Aims at keeping talented and high performing employees. Employees are interested in more than a paycheck, and they will like to earn job promotions to demonstrate their skills and abilities. One of the ways to motivate employees is by rewarding with promotion after an excellent performance.

Environment: Involves assessing how the external environment is affecting the rewards program.  Obtaining customer feedback would help the organization to assess its reward program. It would be appropriate for the employer to use customer satisfaction points in the total reward program. This will create a new and innovative way of rewarding employees.

Attraction: This element aims at attracting the right talent for the right job position.  The reward program can achieve this by focusing on the employees’ professional interests. Apart from the total reward benefits, employees are also interested in their career success. As such, the total reward program should also consider the employee development plan that will help them to develop their careers and meet their professional goals. Training and development elements will help employees in meeting their career success goals. Workplace wellness programs also attract new candidates to the organization. Creating a flexible workplace where employees can be allowed to participate in health programs is also another form of reward that could help in improving the total reward program. By having health and wellness fitness resources in the workplace, employees are likely to improve their health and minimize health-related costs.

Recommend a process that optimizes an employee-based suggestion program to continually refresh the total rewards of the organization.

The search for highly talented employees has been increasing among employers. This trend gives employees a competitive bargaining force in presenting their interests in the organizations’ reward programs. To meet their needs, employees can use the PRIDE System as presented by Kuethen (2018) to refresh the total reward program.

P: Positive work environment. A positive work environment is created based on what motivates employees.

R: Recognize, Reward, and Reinforce the Right Behavior. This helps to build morale and motivation.

I: Involve and Engage. This is achieved appropriately by creating a team and teamwork.

D: Develop skill and Potential. This is attained through training and education.

E: Evaluate and Measure. Focuses on continuous measurement of motivation, morale, and attitude of the workforce.

The employee suggestion program has been found to boost employees’ morale and enhance the organization’s corporate culture. According to Zundel (2017 ), companies are likely to develop positive changes from their employees’ suggested programs, and this increases engagement and performance. Employees are assumed to be key observers and are likely to have a mixture of useful ideas that can impact the organization positively (Patton, 2018). The survey conducted by Bersin Insights (2018) revealed that high performing companies consider employee preferences in their reward programs. These organizations were found to focus on the employees’ best fit, and that align reward strategies with particular business goals. Organizations putting employee interests in the reward programs were found to be 12 times better than low-performing companies in differentiating themselves from the competitors. The PRIDE process used by employees in suggesting the reward program presents the desire of employees to understand the organization’s compensation and determine whether they are rewarded fairly compared to other employees both inside and outside the company.

References

Aflac. (2016). Small company business trends: 2016 Aflac WorkForces Report results for businesses. Retrieved from https://www.aflac.com/docs/awr/pdf/2016-detailed-findings/awr.2016-fact-sheet_small-business-trends-less-than-50.pdf

Akalp, N. (2015, June 16). The pros and cons of offering equity to your employees. Retrieved from Mashable: https://mashable.com/2015/06/16/offering-equity-employees/

Bersin Insights. (2018, April 6). Insights from IMPACT 2018: Designing a Rewards Program for Best Fit. Retrieved from Deloitte: https://capitalhblog.deloitte.com/2018/04/06/insights-from-impact-2018-designing-a-rewards-program-for-best-fit/

Bran, C., & Udrea, C. (2016). The Influence of Motivation and Flexibility on Job Performance. The European Proceedings of Social & Behavioral Sciences, 135-143. Retrieved from https://www.futureacademy.org.uk/files/images/upload/WLC2016FA016F.pdf

Frye, M. B. (2004). Equity-Based Compensation for Employees: Firm Performance and Determinants. Journal of Financial Research, 27(1), 31-54. doi:10.1111/j.1475-6803.2004.00076.x

Grant, A. M. (2007). Relational Job Design And The Motivation To Make A Prosocial Difference. Academy of Management Review, 32(2), 393–417. Retrieved from https://selfdeterminationtheory.org/SDT/documents/2007_Grant_AMR.pdf

Hoole, C., & Hotz, G. (2016). The impact of a total reward system of work engagement. Journal of Industrial Psychology, 42(1), 1-14. doi:10.4102/sajip.v42i1.1317

Kuethen, M. (2018). The Pride System: Building a Productive Workforce. Retrieved from Amtec: https://www.amtec.us.com/blog/the-pride-system-building-a-productive-workforce

LeitĂŁo, d. S., CorrĂȘa, J., & Lourenço, C. (2016). Strategic Compensation as a Factor of Attraction for Students Graduating in Business Administration: A Brazilian Case. Journal of Human Resource and Sustainability Studies, 4, 162-175.

Leslie, L. M., Manchester, C. F., Park, T.-Y., & Mehng, S. A. (2012). Flexible Work Practices: A Source of Career Premiums Or Penalties? The Academy of Management Journal, 55(6), 1407-1428. doi:10.5465/amj.2010.0651

MetLife. (2018). MetLife Employee Benefit Trends. Retrieved from https://www.metlife.com/employee-benefit-trends/

Miller, S. (2016, November 13). Employers Alter Benefits to Attract, Retain Employees, SHRM Finds. Retrieved from SHRM: https://www.shrm.org/resourcesandtools/hr-topics/benefits/pages/alter-benefits-attract-retain.aspx

Ong, M. J. (2013). Gamification and its effect on employee engagement and performance in a perceptual diagnosis task. The University of Canterbury. Retrieved from https://core.ac.uk/download/pdf/35469107.pdf

Patton, C. (2018, May 21). Employers Need to Revamp Total-Rewards Programs. Retrieved from Huma Resource Executive: https://hrexecutive.com/employers-revamp-total-rewards-programs/

Perryer, C., Celestine, N. A., Scott-Ladd, B., & Leighton, C. (2016). Enhancing workplace motivation through gamification: Transferrable lessons from pedagogy. The International Journal of Management Education, 14(3), 327–335. doi:10.1016/j.ijme.2016.07.001

Robbins, S. (2004). Is Equity-Based Compensation a Good Thing? Harvard Business Review. Retrieved from https://hbswk.hbs.edu/archive/is-equity-based-compensation-a-good-thing

Sharkey, B. J. (2019, February 19). Benefits of Equity-Based Compensation. Retrieved from Kreischer Miller: https://www.kmco.com/resource-center/article/leading-edge/benefits-of-equity-based-compensation/

Zundel, C. M. (2017, September 6). Steps And Best Practices For Creating An Employee Suggestion Program. Retrieved from Forbes: https://www.forbes.com/sites/forbescoachescouncil/2017/09/06/steps-and-best-practices-for-creating-an-employee-suggestion-program/#1aa2d87770bf

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