1. An Approach to Total Reward
Peter Reilly, IES
Lis McCormick, Camden

2. Adam Smith in 1776 on total rewards
Employees should maximise their
‘total net advantage’ or ‘total utility’ of work.
This means not just wages but also:
the agreeableness or disagreeableness of work
difficulty and expense of learning it
job security
responsibility
the possibility of success or failure.

3. The development of total reward
External pressures
TR models research
Action Plan
Strategy
Design
Delivery
Business drivers
Positioning TR
Employee needs
External benchmarks

4. Methods: external pressures
Review the work environment in terms of:
labour market
changing demographics
social/economic pressures
cultural norms/expectations
legislation/government imperatives
This should provide a context within which the organisation operates. It affects management thinking and employee perceptions

5. Method: models Inputs to the research from:
Management consultancies (Hay, Towers, etc.)
US consultants/commentators (eg Schuster and Zingheim)
Academic research (eg Armstrong, etc.)
IES’s own work
These offer a framework that allows you to make sense of the data you gather and organise it to give a meaningful results

6. The Dean Shoesmith model

7. Total reward model - Towers Perrin
TRANSACTIONAL (TANGIBLE)
PAY/REWARD
base pay
contribution pay
shares/profit sharing
recognition
BENEFITS
pensions
health care
perks
flexible benefits
INDIVIDUAL
COMMUNAL
LEARNING AND DEVELOPMENT
workplace learning
training
performance management
career development
WORK ENVIRONMENT
core values
leadership
employee voice
job/work design
RELATIONAL (INTANGIBLE)

8. Cabinet Office total reward
Quality of work
Work/life balance
Inspiration/ values
Tangible rewards
Future growth opportunity
Enabling environment
Supportive environment
Recognition of life cycle needs
Flexible work & retirement options
Security of income
Social environment
Perception of the value of work
Challenges/ interest
Achievement opportunities
Appropriate freedom & autonomy
Workload
Quality of work relationships
Quality of leadership
Public services values
Promotion of diversity
Reputation of the organisation
Risk sharing
Recognition of achievements
Dialogue, consultation, communication
Competitive pay & progression
Good benefits
Incentives for higher performance
Recognition awards
Fairness of reward
Learning & development beyond current role
Career advancement opportunities
Regular feedback on performance
Physical environment
Tools & equipment
Training for current role
Sound IT/ work processes
Safety/ personal security
Hay Group

9. Another approach to total reward
Individual growth
Development
Training
Career enhancement
Performance management
Compelling future
Vision/values
Growth/success
Image/brand
Total pay
Base
Variable
Benefits
Recognition
Positive workplace
People focus
Leadership
Collegiality
Job content
Trust/commitment
Involvement/openness
Adapted from Schuster and Zingheim, 2000

10. Method: business drivers
Interview senior managers
Interview with HR director
Review business strategy documents, including
SWOT analysis
Look at CAA/other audit reports
This should define what the organisation is seeking from employees, and what part reward might play

11. Method: employee needs
Conduct focus groups with a cross section of employees by:
grade
length of service
gender/ethnicity
function/occupation
and/or
Conduct an employee attitude survey
Review results of previous surveys/reviews
The aim is to ascertain why staff join and stay, what motivates/demotivates them at work, looking at reward in the broadest sense

12. Method: benchmarking
Take account of what other similar organisations do regarding Total Reward
Examine lessons from those regarded as strong exemplars of Total Reward
Consider general or specific messages about recruitment, retention, motivation in the sector
Aim is to take account of good practice
and position this exercise in the context of others’ experiences

13. Action Plan Strategy - link to other HR initiatives
Design - establishing cost/benefit and risk of change
Delivery - especially communicating nature of Total Reward and value to employees

14. Different foci Total reward usually focuses on some combination of:
The brand – developing an attractive value proposition for attraction/retention
Understanding – ensuring employees realise the full value of their reward package
Choice – delivering a degree of reward personalisation believing that it is now required
Segmentation – determining what different groups react to/are influenced by

15. Delivery options on Total Reward
Strategic Tactical
Focus/ Employees
All
Segments
Total rewards philosophy
Fully flexible packages
Leave buying/selling
Total reward statements
Different reward offer for different groups
Focus on key groups, eg hipots
Flexitime for administrative staff
Childcare vouchers

16. In practice… Variable levels of Total Reward integration
Average (where 1 is not integrated and 5 is fully integrated)
CIPD Reward Survey

17. Broad methodological options
Deductive approach
take a model and see how well it applies
use the management perspective and see how well employees fit
Inductive approach
collect the views of staff and make sense of them
interactively fit with a model
see what gap there is between employee and management position

18. The Camden Context Four-star, highly improving Council
Embarking on a major project to modernise reward structures (Performance, Development & Reward Framework)
Clear view of where we need to be in reward terms as a business; less clear on our employee’s views and aspirations
Capital Ambition/IES research project an ideal opportunity to ‘close the loop’

19. Approach used at Camden
8 structured discussion groups, segmented to reflect:
grade
work pattern (FT/PT)
length of service
work activity
gender
simple questionnaire to complete
employee total reward survey (online)
re-analysis of recent general staff survey

20. Employee segments Looked at the following groups:
female service delivery staff, lower grades
male service delivery staff, lower grades
administrative/clerical
professionals
young, new hires
well established staff
specific directorates
senior managers

21. Components of total reward: theory
Attractive organisation
Vision/values
Growth/success
Positive brand
Effective organisation
People focus
Leadership
Collegiality
Trust/recognition
Involvement/openness
Development
Development/training
Career enhancement
Total remuneration
Base
Variable
Benefits
Adapted from Schuster and Zingheim, 2000

22. Differences in reward perceptions e.g. male v female service delivery
Attractive organisation
Males more interested in brand – proud to work for council
Females less attached to brand
Effective organisation
Trust/fair treatment for both
Males: Involvement & openness, management capability
Women: Work conditions and good atmosphere
Development
Males have greater ambitions to develop
Females may want specific skills
Total remuneration
Pension important for both
Flexitime more important for men; pay a bit less so

23. Pilot results Describe an organisation we recognise overall:
Pension well regarded – but not well understood!
High levels of pride in job for those in client-facing roles
Narrow view of what constitutes ‘development’
… but with one or two surprises:
More satisfaction with pay than we expected
Strong desire for development among male service providers

24. Pilot outcomes
We will ‘reverse check’ the pilot results via our Employee Network
Results provide an important justification for, and verification of, our planned approach
Results won’t change what we do; but
They give additional confidence around ‘fitness for purpose’
They’ll inform how we segment and package the Performance, Development & Reward framework
We will amend the emphasis in our communications

25. … thank you