The WorldatWork Handbook of Total Rewards

A Comprehensive Guide to Compensation, Benefits, HR & Employee Engagement

Dan Cafaro

• Verlag: Wiley
• Jahr: 2021
• ISBN:
  9781119682493
• Auflage: 2
• Thema: Betriebswirtschaft
• Thema: Personalmanagement

Equip yourself to manage, motivate, compensate, and reward everyone in this workplace revolution

The future of work is here. From the shift to Millennials and Gen Z in the workforce to the advent of the Fourth Industrial Revolution and the Gig Economy, the world of work and rewards has significantly changed since the initial WorldatWork Handbook was published. Human resources and total rewards professionals need tools to equip them to manage a changing workforce. This completely revised second edition addresses the challenging and disruptive issues facing employers today and tomorrow.

The WorldatWork Handbook of Total Rewards is the definitive authority on compensation and rewards from the leading global nonprofit organizations for professionals who are engaged in the critically important practice of total rewards. This book is a go-to resource for all business professionals and leaders who reward and create productive, committed and inspired workforces worldwide. Readers will learn the basics of rewards, along with a deep dive and high-level view of how rewards programs enable organizations to deliver on their brand promises and perform at their optimal level.

• Gain a thorough understanding of compensation and benefits, along with employee well-being, development, and recognition, all updated to address the realities of today's workplace.
• Understand why the Millennial and Gen Z workforce requires a different value proposition, and how to meet their needs.
• Discover the tools and techniques you need to help you reskill and become a highly valued workforce contributor and leader in the digital era.
• Learn how to attract, retain, and engage talent by building a healthy workplace culture and employing unique incentives that drive high performance and loyalty.

Technical enough for specialists but broad in scope for managers and HR generalists, this well-rounded resource belongs on the desk of anyone interested in organizational effectiveness. An indispensable tool for understanding and implementing the total rewards concept, The WorldatWork Handbook of Total Rewards, Second Edition is the key to designing programs and practices that ensure employee engagement and organizational success.

1
The Power of Total Rewards

Sixty-five years ago, when a group of visionary professionals formed what was to become WorldatWork, the world of work and the world of pay were much simpler than they are today. Compensation was the primary “reward” and benefits, still in their infancy, were a separate and seemingly low-cost supplement for employees. The concept of combining these things – let alone using them with still other “rewards” to influence employee behavior on the job – was decades away.

Today we are only partially through an evolution from a largely industrialized business environment to a far more virtual, knowledge- and service-based environment, at least in North America and Europe. Among some major shifts:

• Business increasingly operates as a global village, with work moving to different parts of the world to take advantage of lower-cost labor and address skill gaps.
• Technology continues to revolutionize work, not only in terms of automating more jobs, but also in enabling the virtual workplace as professionals increasingly conduct business in home offices or remote locations.
• Women are equally represented in the overall workforce, if not yet fully in the ranks of senior management.
• Traditional hierarchical distinctions have eroded in the name of faster decision-making and speed to market. Teamwork is one of the most common behaviors rated in performance reviews.
• More businesses and business units in the United States are owned by European or Asian parents, which expect their practices and norms to be followed and respected in the workplace.
• Job mobility is taken for granted. According to the Bureau of Labor Statistics, the average worker in 2020 currently holds 10 different jobs before age 40, and this number is projected to grow. Forrester Research predicts that today's youngest workers will hold 12–15 jobs in their lifetime.
• Gender, race, and religious differences are a common part of most work environments. Diversity has become a respected value, demonstrated through a range of specific programs.
• Business leaders increasingly regard employees as drivers of productivity, rather than as relatively interchangeable cogs in a larger wheel.

Along with these changes have come dramatically different views about the nature of rewards. In the shift toward a more knowledge- and service-based economy, the relationship, or deal, between employer and employee began to evolve as well. Viewing employees as performance drivers meant thinking differently about what it would take to attract, keep, and engage them in giving discretionary effort on the job. And so total rewards entered the lexicon to address these needs.

BROADENING THE DEFINITION OF TOTAL REWARDS

The definition of total rewards always sparks debate. For example, Figure 1.1 includes a comprehensive list of items that have shown up at one time or another in one organization's definition of total rewards. From this, it is easy to see how people can use the term in conversation only to find that they are referring to very different notions.

Generally speaking, there are two prevailing camps of definitions:

• Narrow definitions. These virtually always comprise compensation and benefits, and sometimes they include other tangible elements (e.g., development). This sometimes is referred to as total compensation or total remuneration.
• Broad definitions. These can expand to encompass everything that is “rewarding” about working for a particular employer or everything employees get as a result of their employment. Sometimes terms such as value proposition total value are used interchangeably with total rewards.

While the narrower definitions have been around for a long time, it is the broader notion that is generating buzz. Indeed, much of the current activity in total rewards involves organizations moving to a broader definition. There are several reasons for this:

• Erosion of the “core” elements of the package. The traditional elements of rewards – pay, benefits, and stock awards – are no longer differentiating factors for organizations. The competitive position for pay is trending toward median or mean. Benefits costs continue to rise. Stock programs, such as the distribution of options, do not offer the appeal they once did. Given all of this, a logical response is to broaden what organizations provide for the overall employment package.

  Direct Financial Base Salary Bonus Cash Profit Sharing Employee Referral Program (Cash) Stock Programs Suggestions Programs (Cash for Ideas) Indirect Financial Adoption Assistance College Savings Plan College Tuition and Fees Commuter Reimbursement (Pretax) Company Cafeteria Company Store Dependent Care Dependent Scholarships Discount Tickets Educational Assistance Fitness Facilities Discounts Health and Welfare Benefits Incremental Dependent Care (Travel) Insurance (Auto/Home) via Payroll Deduction Long-Term Care Insurance Matching Gifts Relocation Program Retirement Plan(s) Saving Bonds via Payroll Deductions Scholarships Stock Purchase Program Student Loans Tuition Reimbursement

  Work Autonomy Casual Dress Policy Challenging Work Constructive Feedback Covered Parking Ergonomics/Comfortable Workstations Flexible Work Schedules Free Parking Interesting Work Job Skills Training Modern, Well-Maintained Workspace Open Communication Performance Management Promotion Opportunities Safe Work Environment Suggestion Program (No Cash) Telecommuting Opportunities Uniforms/Uniform Allowance Workshops Career 360º Skills Assessment Career Advancement Coaching Lunch and Learn Series Management Development Mentoring Program Open Job Posting Preretirement Counseling Service Awards Training and Development

  Affiliation Athletic Leagues Community Involvement Diversity Programs Employee Celebrations Employee Clubs Professional Associations Seminars Spring and Holiday Parties Support Groups Volunteer Connection Other/Convenience ATMs Onsite Carpooling/Van Pooling/Shuttles Car Seat Vouchers (for Newborns) Child Care Resources Credit Union Employee Assistance Program Employee Card and Gift Shop Expectant Parent Program Legal Services Medical Center Military Deployment Support Online Services Onsite Dry-Cleaning Pickup Onsite Flu Shots Onsite Food Services Onsite Post Office Personal Travel Agency Wellness Program Worldwide Travel Assistance

  FIGURE 1.1 Total rewards: different things to different employers.

• Pressure for operational efficiency and effectiveness. Total rewards can represent a major cost element. As organizations seek to manage costs tightly, there is more emphasis on ensuring that all costs are counted and managed. By redefining rewards more broadly and focusing on those elements that achieve the biggest payoff, organizations can drive toward efficiency.
• Catering to diverse needs. Organizations today are managing a much more heterogeneous population. For the diverse workforce, no single component becomes a value driver. Employees have choices to make and a need for greater flexibility. A broad definition of total rewards helps employers show how their slate of rewards responds to the broad needs of today's global workforce.
• Need to more strongly reinforce business strategy. Organizations are concerned about sending clear business messages to employees. A properly structured total rewards package sends a key message. By aligning all the components of total rewards with the overall business vision, a company ensures its workforce is on the same page.

Given these factors, it is not surprising that a broader definition is gaining favor in the marketplace. Organizations still need to decide how broadly they want to define total rewards, based on what they can adequately measure and manage.

What Is Total Rewards?

Total rewards encompasses the elements – compensation, well-being, benefits, development, and recognition – that, in concert, lead to optimal organizational performance. When designed strategically and executed in alignment with business goals, total rewards programs fuel motivated and productive workforces that feel appreciated and rewarded for their contributions, driving the organization to ever greater success.

The Total Rewards M...