1. Deborah Voyt, Ph.D. Presented at D-SHRM Total Rewards October 2013
THE CRITICAL LINK: GLOBAL TOTAL REWARDS CULTURE, STRATEGY AND YOUR BOTTOM LINE
Deborah Voyt, Ph.D.
Presented at D-SHRM Total Rewards
October 2013

2. Global economy and need to manage costs has changed the total rewards model
Traditional view of total rewards - pay and benefits
Limited compensation budgets and benefit reductions
Companies must focus on other key total rewards elements aligned with organizational culture
Maximize the employee value proposition - globally
Attract, retain, and engage knowledge workers
Global framework with local flexibility
Traditional view of total rewards focuses on competitive compensation and benefits
Limited compensation budgets and benefit reductions make it challenging to reward and motivate in the traditional sense
Today the focus on other key total rewards elements aligned with organizational culture
Maximize the employee value proposition
Attract, retain, and engage knowledge workers

3. New Total Rewards Model
WorldatWork Total Rewards Model
Compensation
Benefits
Performance and recognition
Development and career opportunity
Work life
Unique way a company integrates the five elements defines the organizations strategy to attract, motivate and retain employees
Total rewards model is flexible and tailored to meet the needs of the business, employees, and aligned with organizational culture

4. Organizational Culture and Total Rewards
Highly successful companies have strong unique cultures
Support employees to achieve strategic objectives and enhance organizational performance
Total rewards systems design and how individuals are rewarded communicate an organization’s beliefs and values
Attract the right employees
Key to understanding organizational culture
Strategic human resources management (SHRM) practices such as reward strategies help to “create a distinctive and unique culture of people with homogeneous work values, norms, and tastes” (Bloom & Milkovich, 1998, p. 13). Compensation and rewards systems structure and define the terms of the relationship between employees and the organization and are important determinants of employee behavior (Bloom & Milkovich, 1998; Gerhardt & Milkovich, 1992). Total rewards systems design and how individuals are rewarded communicate an organization’s beliefs and values and are key to understanding organizational culture (Kerr & Slocum, 2005). Reward systems can be structured to help create and support the desired culture to attract individuals with the right values, skills, knowledge, and abilities and motivate them to further organizational goals and objectives (Bloom & Milkovich, 1998). Reward systems that do not fit the culture prevent organizations from maximizing the employment relationship required for organizational success. Analyzing reward systems can provide leaders with a basis for developing reward systems that support the current organizational culture or supporting long-term cultural change in an organization (Kerr & Slocum, 2005).

5. Total rewards can support or detract
Attract individuals with right values, skills, knowledge, abilities
Motivate to further organizational goals and objectives
Reward systems that do not fit the culture can negatively impact performance and employee engagement
Business culture and local country culture

6. What is culture? It’s simple “the way we do things around here”
A set of shared, subconscious assumptions and tacit beliefs

7. Total rewards systems reflect and reinforce the cultural norms
Primary signal of organizational values and culture
Business leaders and human resources professionals are placing greater emphasis on culture and the fit with total rewards to attract, retain, and motivate employees to increase individual and firm performance
A survey of 1,200 international business executives show that 90% believe that corporate culture is as important as business strategy for organizational success (Bain & Company, 2007)
Human resources leaders cite organizational culture as one of the key challenges facing them today along with attracting and retaining key talent and leadership development (Theaker & Piercy, 2008)

8. Challenges to Culture and Change
New competitors
Demanding customers
Complaining staff
Decreasing profit and sales
Merger or reorganization
Going global

9. Culture has an impact
Research has shown the powerful impact on performance and long-term effectiveness of organizations

10. Culture makes the difference
The effects on employee morale and retention, commitment, productivity and innovation are well documented

11. If you don’t use culture, culture will use you
If you’re not aware, it will shape you
Human beings Copy, Coach, and Correct each other to fit into the group
So make sure Culture works for you, instead of against your necessary change

12. Competing Values Framework Cameron and Quinn, 2006

13. Survey Questions
The Organizational Culture Assessment Instrument (OCAI)* was used to identify the dominant culture of your organization based on the Competing Values Framework (CVF)
Three open-ended questions were examined, organized, and coded into total rewards categories or broad themes
Question 1: The most important characteristic or attribute that makes my organization's total rewards strategy effective is:
Question 2: The one or two characteristics or attributes that need to be changed to improve the effectiveness of my organization's total rewards systems are:
Question 3: Success of the total rewards system at my organization is measured by:
* OCAI developed by Cameron and Quinn (2006)

14. Company Profiles

15. Organizational Culture Type Survey Results

16. Top 3 Themes Identified Pay-program attributes, Alignment, and Benefits
Needs improvement (14%); effective (8%)
Funding, stability, pay differentiation, timing
Alignment (14%)
Needs improvement (6%); effective (8%)
With organizational strategy, objectives, and results
Other total rewards elements and human resources systems
Alignment with organizational culture and employee line of sight
Benefits (13%)
Needs improvement (7%); effective (6%)
Competitive position to the market
Need to improve retirement plans through reinstatement of the company 401k match
Education reimbursement

17. Organizational Culture Type Survey Results

18. How Total Rewards Success is Measured

19. Clan Culture People-oriented, friendly
Leader: facilitator, mentor, team builder
Value: commitment, communicate, develop
Effectiveness: development and participation
Cameron and Quinn, 2006

20. Total Rewards Major Themes Clan Culture
Pay-program attributes – 8%
Stability and funding
Link between pay and performance
Alignment – 5%
Alignment with organizational strategy and other HR systems
Benefits – 3%
Organizational culture
Work environment – 3%
Work-life balance

21. How success is measured Clan Culture
Retention
Employee engagement scores
Attraction
Total rewards utilization

22. Clan Culture Total Rewards Considerations

23. Market Culture Results-oriented, competitive
Individuals are competitive and goal-oriented
Leader: hard driver, competitor, producer
Value: market share, goal achievement, profitability
Aggressively competing and customer focus
Cameron and Quinn, 2006

24. Total Rewards Major Themes Market Culture
Pay-program attributes (6%)
Link pay and performance
Timeliness
Alignment (6%)
Alignment with organizational strategy
Integration with other reward programs
Alignment with organizational culture and other human resources systems
Development and career opportunities (4%)

25. How is Success Measured Market Culture
Retention – 40%
Exit interviews – 20%
Cost – 20%
Not measured – 20%

26. Market Culture Total Rewards Considerations

27. Hierarchy Culture Controlled, structured
Leader: coordinator, monitor, organizer
Value: efficiency, consistency, timeliness, uniformity
Control and efficiency and capable processes
Cameron and Quinn, 2006

28. Hierarchy Culture Benefits (4%) Communication (4%)
Providing good benefits
Communication (4%)
Providing open communication about total rewards
Value of total rewards
Linkage to business strategy
Development and career opportunities (3%)
Need to improve
Cameron and Quinn, 2006

29. Hierarchy Culture Total Rewards Considerations

30. How is Success Measured Hierarchy culture
Retention (5%)
Employee engagement scores (1%)
Ability to recruit (1%)
Cost (1%)
Customer feedback (1%)
Cameron and Quinn, 2006

31. Adhocracy Culture Dynamic, entrepreneurial
Leader: innovator, visionary, entrepreneur
Value: innovation, agility, transformation
Innovativeness, vision and new resources
Cameron and Quinn, 2006

32. Total Rewards Major Themes Adhocracy culture
Pay-program attributes
Pay above market levels
Alignment with future business/growth strategy
Benefits
Retirement
Education assistance
Work-life balance
Respect for employees

33. How is Success Measured Adhocracy culture
Company performance – 50%
Cost – 50%

34. Adhocracy Culture Total Rewards Considerations

35. Questions