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

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

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

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 2

3 New Total Rewards Model Compensation Benefits Performance and recognition Development and career opportunity Work life 3 WorldatWork Total Rewards Model 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 4

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 5

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

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) 7

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

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

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

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 11

12 Competing Values Framework Cameron and Quinn,

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: 13 * OCAI developed by Cameron and Quinn (2006)

14 Company Profiles 14

15 15 Organizational Culture Type Survey Results

16 Top 3 Themes Identified Pay-program attributes, Alignment, and Benefits Pay-program attributes (22%) – 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 16

17 Organizational Culture Type Survey Results 17

18 How Total Rewards Success is Measured 18

19 Clan Culture People-oriented, friendly Leader: facilitator, mentor, team builder Value: commitment, communicate, develop Effectiveness: development and participation 19 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 20

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

22 Clan Culture Total Rewards Considerations 22

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 23 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%) 24

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

26 Market Culture Total Rewards Considerations 26

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

28 Hierarchy Culture Benefits (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 28 Cameron and Quinn, 2006

29 Hierarchy Culture Total Rewards Considerations 29

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

31 Adhocracy Culture Dynamic, entrepreneurial Leader: innovator, visionary, entrepreneur Value: innovation, agility, transformation Innovativeness, vision and new resources 31 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 32

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

34 Adhocracy Culture Total Rewards Considerations 34

35 Questions 35


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