Total Rewards Flashcards
Goal of Total Rewards Program
to attract, retain and motivate employees, while shaping employee behaviour (membership behaviour, task behaviour, organization citizenship behaviour)
Membership Behaviour
people want to join your organization and currently employees want to stay
Task Behaviour
employees do the tasks assigned to them
Organization Citizenship Behaviour
employees motivated to support the success of the org
Intrinsic Rewards
relate to job content; include things such as task identity, task significance, skill variety, job autonomy and job feedback
Task Identity
doing the whole job
Task Significance
social value of the task
Skill Variety
utilizing multiple/variety of skills
Job Autonomy
freedome to act idependently
Job Feedback
self monitoring the job
Extrinsic Rewards
relate to job context; include thing such as monetary rewards, direct pay, and indirect pay
Types of Monetary Rewards/Direct Pay
base pay, performance pay
Types of Performance Pay
merit pay, short term incentives, long term incentives
Types of Indirect Pay
health and wellness benefits, retirement plans, leaves with pay, working conditions, EAP
Theories of Employee Motivation
Content Theories of Motivation include Maslow’s Hierarchy of Needs, Herzberg’s Two Factor Theory, Hackman and Oldham’s Job Characteristics Theory
Process Theories of Motivation include Reinforcement Theory, Expectancy Theory, and Equity Theory
Maslow’s Hierarchy of Needs
First look at Basic needs, those being physiological (food, water) and security needs (shelter, safety). Then proceed to Psychological needs, those being belonging needs (love, acceptance) and eco needs (self esteem, accomplishment). Finally step is self actualization with creative fulfillment, satisfaction in reaching ones potential.
Herzberg Two Factor Theory
Two factors are Hygiene Factors and Motivators.
Hygiene Factors can lead to job dissatisfaction. They include pay, status, working conditions, benefits, policies etc.
Motivators increase job satisfaction. These include meaningful and challenging work, recognition, increased responsibility and growth opportunities.
Hackman and Oldham Job Characteristics Theory
Job characteristics that must be in place in order to achieve employee satisfaction include skill variety, task identity, task significance, task autonomy and job feedback. These characteristics lead to job enrichment.
Job Rotation
employees crossing over to tasks normally carried out by a co-worker in order to break up work and create a multi-skilled workforce
Job Enrichment
adding/introducing engaging elements to the role
Reinforcement Theory
Individuals’ behaviour is a function of its consequences; focusing on what happens to an individual they they take action; can use positive reinforcement, negative reinforcement, punishment and extinction
Positive Reinforcement
giving a positive response when a person shows positive and/or required behaviour
Negative Reinforcement
rewarding employee by removing negative/undesirable consequences
Punishment
removing positive consequences to lower probability of repeating undesirable behaviour; applying undesirable consequences for showing undesirable behaviour
Extinction
absence of reinforcements; lowering probability of undesired behaviour by removing reward for that kind of behaviour
Expectancy Theory
individual will behave or act in a certain way because they are motivated to select a specific behaviour over others, due to what they expect the result of that behaviour to be
Equity Theory
employees motivated by fairness; if an individual identified between themselves and a peer, they will adjust the work they do in order to make situation fair in their eyes.
Process for Establishing Job Worth
Job Analysis -> Job Description & Specifications -> Base Pay Methods
Types of Job Analysis
Position Analysis Questionnaire (PAQ), Critical Incident, Task Inventory, Comptency-Based, and Functional Job Analysis
Position Analysis Questionnaire (PAQ)
quantifiable data collection to determine degree that a large # of standard, work-oriented tasks are performed in a job (ie frequent, infrequent etc)
Task Inventory Analysis
identification of all job tasks specific to an org in order to create a job questionnaire for incumbents to complete
Critical Incident Method
collection of specific task statements that describe the tasks most important in carrying out the job successfully
Competency-Based Analysis
identifying the key competencies required in performing the job vs the tasks involved
Functional Job Analysis
tasks statements of four components of - who performs what, to whom, with what tools, to achieve what outcome
Methods to Determine Base Pay
Market Pricing Method, Pay for Knowledge Methods, Job Evaluation Method
Types of Pay for Knowledge Methods
Competency-based method, skill-based method
Market Pricing Method
utilize job descriptions to compare jobs to like positions within the external marketplace
Competency-Based Method
assess pay based on the knowledge, skills and abilities necessary to accomplish the organizational goals
Skill-Based Method
assess pay based on formal certifications of skills, knowledge or competencies.
Methods of Job Evaluation
ranking, job classifications/grading, factor comparison and point-factor
Ranking Job Evaluation
examine job descriptions and arrange jobs according to their value to the company
Job Classification/Grading
generic job descriptions are used to anchor a job-grading structure against which all jobs are compared
Factor Comparison
dollar values are assigned to job “factors” and added to determine the jobs’ worth in dollars
Point-Factor
numerical values (points) are assigned to job “factors” and added to dtermine the jobs worth in points
Skill
the experience, training, ability and education required to perform a job under consideration
Effort
the measurement of the physical, mental or emotional exertion needed to perform a job
Responsibility
extent to which an employer depends on the employee to perform a job as expected, with emphasis on the importance of job obligation
Working Conditions
difficult or unhealthy aspects of the conditions in which the job is done
Steps to Establish Pay Equity
- determine what rules apply (federal, union vs non union etc)
- identify female and male job classes
- compare jobs
- check for permissible differences
- adjust compensation
- communicate results
- maintain
Direct Pay
monteary rewards comprised of base pay and/or performance pay
Creating Direct Compensation
look at what competitive market is paying (based on surveys, timing and industry) then determine how competitive the org would like to be; create the wave curve and determine compa-ratio
Individual Compa-Ratio
salary divided by range midpoint
Pay Grade Compa-Ratio
mean salary divided by range midpoint
Dept/Job Family/Company Compa-Ratio
mean compa-ratio of all employees in question
Performance Pay Plans
not guaranteed and varies based on performance
Individual Short Term Reward Performance Plans
raise (based on merit or seniority), lump sum merit bonus/incentive, commission, standard piece rate, differential piece rate
Group Short-Term Incentive Performance Plans
goal sharing (signle, multi, financially funded) or profit sharing (current, deferred, combination)
Gain-Sharing
scanlon, rucker, improshare, family of measures
Types of Long Term Rewards
employee stock bonus plans, employee share purchase plans, employee stock option plans, phantom shares
Creating In-Direct Compensation Program
benefits mandated by law, retirement plans, income protection, health benefits, paid time off, employee service, special purpose (attendance/service, peer recognition), retirement plans
Defined Contribution Retirement Plan
registered RRSP, deferred profit sharing
Defined Benefit Retirement Plan
years of service x average salary
