Pay People Right Zingheim & Shuster Chapter 2 The Business Case for Changing Rewards

Value of the Business Case Pay is a powerful communicator of values and direction Companies must make profit and increase shareholder value Executives need justification to make change The business case justifies change to the workforce

The Better Workforce Deal Covey: “Win-win or no deal” Third in a series of “deals” –The Old Workforce Deal –The New Workforce Deal –The Better Workforce Deal –Chart, page 24

Business Reasons for Changing Rewards Define the reason for needed pay changes Your company and it’s business case The workforce and the business case

Total Pay Diagnostic Evaluating the Business Situation Determining Total Pay Alignment What Should Your Company Do?

Articulating the Business Case for Change Straightforward Message Critical Stories to Tell –Why –Present state –Impetus for change Case Examples –Owens Corning – Skills/performance –Monsanto - Competencies

Where the Reward Principles Apply in the Business Case Principle 1 – It’s not possible to make people comfortable with change unless they see the value and understand the reasons Principle 2 – Articulate the business goals and outline the win-win so people can see why total pay must change and what’s in it for them

Where the Reward Principles Apply in the Business Case Principle 3 – extend line of sight by showing people how they link to the KSA’s and outcomes the business needs to succeed Principle 4 – integrate rewards so everyone gets a clear and consistent message about what is valued

Where the Reward Principles Apply in the Business Case Principles 5 and 6 – The business case may include rewarding individual ongoing value with base pay and rewarding results with variable pay to accelerate a successful win-win partnership