Topic 2 Flashcards
Absolute Level
The reward can be defined. Paying an employee $50,000 salary per year, for example, is a defining absolute level.
Broad Input
Help, advice and thoughts from employees of all levels of the organization.
Business Strategy
The collection of decisions, approaches, and activities that allow an organization to compete and win
Business Strategy Support
Supporting a business’ approach to adapting to changes in its environment in order to compete and win.
Centralized Approach
The Human Resources department makes all decisions relating to pay strategy, as well as specific reward decisions.
Centralized Global Rewards Strategy
Organizations attempt to have a single set of policies that are determined by the organization and utilized at all locations.
Communication Strategy
A plan for creating, sharing, and receiving information relating to its Total Rewards Systems.
Cost Leadership Strategy
Focusing business priorities on providing a lower-cost product or service
Critical Success Factors
Capabilities, activities, customer perceptions, and market positions that allow an organization to outcompete its rivals
Data
Facts and statistics collected for reasoning or calculation.
Decentralized Approach
Decisions can be made by the employee’s immediate supervisor or manager.
Decentralized Global Rewards Strategy
Rewards policies are established and monitored at the country level with each location having discretion to adapt to their unique situations and contexts.
Design Strategy
The process used to design the rewards system.
Differentiation Strategy
Providing innovative, exceptional, and high-quality products and/or services to customers
Domestic Rewards Strategy
Organizations that operate in a single country can define a single Domestic Rewards Strategy.
Global Rewards Strategy
The collection of decisions, guidelines, and policies that define how the total rewards will account for country differences
Human Resource Management
The policies, practices, and systems that manage the interface between the organization and its employees in order to enable long-term organizational performance
Hybrid Approach
Leading the market on certain forms of rewards while matching or lagging the market on other forms.
Hybrid Strategy
Employing a combination of cost-leadership, differentiation, and niche-focused business strategies
Lagging the Market
When an organization provides a lesser amount of the reward than its competitors.
Leading the Market
A Rewards Strategy in which the firm is trying to provide more of a given reward than its competitors for those employees.
Level
Organizations must define what level of each reward will be offered. The level of reward offered can be understood in two ways. First, the Absolute Level of a reward can be defined. Paying an employee $50,000 salary per year, for example, is a defining absolute level. Alternatively, organizations can define their strategy relative to the market.
Matching the Market
A Rewards Strategy of providing an amount of the reward equal to the market average.
National Culture
Finally, differences in National Culture should be considered when rewards systems are designed because employees from diverse cultures may have very different definitions of what is rewarding.
Niche-Focused Strategy
Targeting business priorities toward addressing a specific section of the market
Organizational Culture Fit
The extent to which the Rewards Strategy aligns with and supports the ingrained practices, norms, and values of the organization.
Relative Level
States the rewards strategy as greater than, equal to, or less than some labor market reference point
Reward Equivalence
Organizations also face the important decision Reward Equivalence about across global locations. Due to differences in tax laws, costs of living, exchange rates, and differential perceived costs and rewards of the overseas assignments, organizations have to consider how to motivate the employees to take the expatriate assignment while simultaneously maintaining a sense of equity for those host country employees with which the expatriate works. Anchoring the definition of equivalence to the employees home country, the host country, or some global metric are common approaches.
Reward Form Combinations Strategy
The reward forms offered (e.g., cash, benefits, etc.) and the way in which they relate to each other
Reward Level Strategy
‘How much is being offered?’ Answering this question is the goal of the Reward Level Strategy. In formulating Reward Level Strategy, organizations must define what Level of each reward will be offered.
Rewards Strategy Coherence
The extent to which the parts of the strategy fit together in a logical and clear way.
Role and Control Strategy
The policies and practices that allocate design, implementation, and discretionary control of the rewards system.
SWOT Analysis
Assessing an organization’s internal strengths and weaknesses and external opportunities and threats
Strengths
The firm’s core competencies, abilities and capacities that provide an advantage when meeting the needs of target customers. (i.e., production costs, marketing skills, brand image, technology, design and financial resources).
Total Rewards Content Strategy
Specifies the type, level, and combination of rewards offered to employees
Total Rewards Process Strategies
The decisions, policies, and practices that define how Total Rewards are designed and implemented.
Total Rewards Strategy
The combination of pay forms, plans, policies, and practices that enable long-term organizational performance
Transparency
Clear information on the who, what, when, and why of the reward system is available to all.
Weaknesses
Limitations a firm faces when seeking to deliver value to customers.
