Creating Rewards Without Robbing A Bank

Creating Rewards Without Robbing A Bank | Human Resource Executive Online By focusing on total rewards, employers can reap the benefits of an engaged and satisfied workforce. Creating a rewarding culture doesn't have to cost an arm and a leg.

Monday, December 1, 2008
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Companies that score highly among Human Resource Executive® magazine's "Most Admired for HR" excel in providing key employee benefits, such as internal talent development and work-life balance, according to research by Hay Group, a Philadelphia-based global consulting firm.

But the companies go one step further and clearly communicate a range of company benefits, tangible and intangible to employees.

For example, Deerfield, Ill.-based Fortune Brands sends total rewards statements to employees, which clearly delineate the all-too-real compensation behind healthcare coverage, retirement benefits and other employer contributions.

According to Mel Stark, vice president of Hay Group, the total cash value of benefits from an employer "conservatively, are worth 30 percent of base pay."

Stark says he's surprised every employer does not take advantage of promoting the cash equivalent compensation to their employees, because he views it as a comparatively inexpensive way to increase employee engagement.

"I think there is more ROI from spending some money promoting, educating and reinforcing those things that your organization does for, to and with employees than just trying to compete dollar-for-dollar on a comp package with other employers," he says.

But the almighty dollar shouldn't always take center stage, according to Stark.

Companies that harness a "holistic" approach to benefits -- which can infuse employer value into the very culture of the workplace -- create an engine of engaged and productive workers.

For some, who are committed to their work with service organizations such as the Red Cross or Habitat for Humanity, there is perhaps a moral reward. Yet many organizations can tap into the potential for commitment by nurturing a culture that creates both customer and employee satisfaction.

Bob Nelson, a San Diego-based motivational speaker and author of 1001 Ways to Reward Employees, says that the time to build such a culture isn't when employees are walking out the door.

"The companies that do it best take a long-term approach," says Nelson. Companies that understand "how people will be treated and how they will be respected" create a culture that pays dividends in employee engagement.

"It's a sort of fundamental trust level," he says. "You take a place like Starbucks where, in their core values, No. 1 is trust and respect of every person."

Indeed, Starbucks ranked No. 10 in this year's "Most Admired for HR" list for Human Resource Executive® magazine, and Stark also points to the company as an example of what an engaged culture can produce.

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Nelson says that creating that culture doesn't always mean spending a lot of money -- good news in these post-Apocalyptic Wall Street days.

Among the most effective means of increasing employee satisfaction, says Nelson, is information: Provide employees with news about new products and services, competition and marketing initiatives.

He also recommends that these avenues of communication should run in both directions, by providing employees ways to get involved in decision-making processes.

"You know, Yahoo! has what they call 'Hack Day,' where employees bring forth ideas," says Nelson.

On the one hand, he says, communication events like a "Hack Day" can create new business or product ideas; on the other hand, employees who participate are rewarded by being heard and making a potentially significant impact on the company.

But while HR should play a key role in helping to establish and maintain the culture, the initiative has to come from the top, says Nelson.

"You can look at it from a systems perspective, and you'll find that in those organizations that have it, they have the endorsement and support of upper management," he says.

Nelson also recommends that managers play a key role in asking for employee feedback and suggestions, such as eliciting suggestions for how to better handle customer-service issues, saving money or improving product quality. Creating such an environment can reap great rewards, he says.

"You do that, and you've got a very engaged employee," he says. "To me, that's where the magic is."

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