Chapter 4: Total rewards system and Cafeteria System Flashcards
What are the 4 components of Total Rewards Systems
Fixed base pay/Statutory Benefits: regular income as an existential basis
Variable remunerations components: increase in performance through monetary motivation
Employee Profit Sharing: increase in performance, wealth accumulation
Voluntary Company Social Benefits: increase employer attractiveness, employee retention
What are Statutory Benefits
The benefits the employer must pay to employee: social security, health coverage…
What are the Various Voluntary Social Benefits
Benefits to secure livelihoods, retirement benefits and aid
Primarily material “feel good” benefits
Income-related benefits
Primarily immaterial “feel good” benefits
What is the Tower Perrin Model / Total Rewards Grid
Pay Benefits
Learning and Development Work environment
What is the Cafeteria System
Allows employees to pick the best choice from a number of benefits to suit their individual needs/preferences
It is also the best use of HR budget
What are the 3 different systems in the Cafeteria System
1) Core Plan: A package of non-optional benefits + optional benefits
2) Alternative Menu: Variety of predefined packages of benefits
3) Buffet & Selection Plan: Choose freely individual benefits form range of benefits within certain budget
What are the Advantages of the Cafeteria System
Added Appeal as Employer
Boost Company Image
Increase Staff Satisfaction
Flexibility
Individual
What are the Disadvantages of the Cafeteria System
Added Administrative Work
Requires substantial communication and consultations
Benefits taken quickly for granted
What is the importance for GenZ
Emphasis on work-life balance
Focus on personal development
Recognition and Purpose
Commitment to inclusion, equity and diversity
Financial Security
Customizability
