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Total Rewards and Motivation Mistakes, Myths
and Whats Working

• Laura Wolfe
• April 27, 2012 - LA SHRM

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Objectives

• Present new information about total rewards and
  motivation
• Cover body of knowledge required for CE credit
• Provoke you to think in new ways and about new
  ideas

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Big Picture
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Total Rewards

• monetary nonmonetary rewards companies use to
  attract, motivate and retain employees
• more than comp benefits
• a philosophy

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Foundational Stuff

• Behaviorism
• Law of Effect

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Equity

• Inputs/Outcomes

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Equity

• External
• Labor markets
• Market conditions
• Internal

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Org Justice

• Distributive
• Procedural

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Discussion

• Best thing a company has ever done to motivate
  you?
• Is your company using incentive pay plans?
• How are they working?
• Effective recognition programs?

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Is money the best and ultimate motivator?
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Research

• Teresa Amabile and Steven Kramer
• Book The Progress Principle
• Support workers everyday progress

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Research

• Carol Dweck
• Book Mindset
• Fixed or growth?

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Research

• Dan Pink
• Book Drive
• Autonomy, Mastery, Purpose

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• www.idonethis.com

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Empowerment

• Empowered employees
• Felt worthy, competent, capable
• Performed better, more innovative, more job
  satisfaction, greater commitment, more OCB
• Related
• flexible work hours
• vacation policies (Netflix)

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Happiness

• Frequency, not intensity, of happy experiences
  more important to creating happiness

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Incentives

• Economy a factor
• Shifts
• Technology

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Incentives On-time Behavior

• Timeliness improved through rewards and
  recognition program
• Computer system to track arrival and departure
  times and calculate compensation for arriving
  early
• Most workers arrived early when additionally
  compensated

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Sales Compensation

• Proportion of incentive to base
• Engage others in design process
• Communication
• Technology
• Planning

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10 Sales Incentive Design Mistakes

• Trying to Keep Everybody Happy
• Failing to Separate Novices from Veterans
• Negative Reward on High Productivity
• Targeting Prizes Toward Entire Sales Force
• Planning a Contest with No Sales Force Input

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10 Sales IncentiveDesign Mistakes

• Leaving Top Management Out of the Plan
• Being a Do-Gooder
• Being Inflexible
• Hoping for X While Rewarding Z
• Forgetting that Good Salespeople Always Work for
  Their Own Good First
• From HR Daily Advisor

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Executive Compensation

• CEO pay and performance
• Significant yet modest relationship
• Executive boards dynamically adjust current pay
  according to historical performance

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Executive Compensation

• Top Mgt Team turnover impacted by pay dispersion
• gt the pay differences gt likelihood of turnover
• Market pay levels and cut of total TMT also
  influence turnover decisions
• NBA example ?

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Merit Pay

• Advantages
• reward key talent
• once or recurring
• nudges poor performers
• Disadvantages
• difficult to measure performance
• good systems take resources
• divisive
• communication

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Before PFP Ask

• What is our philosophy?
• Where do we want to be?
• How does it align?
• Do we have
• high performers?
• a performance culture
• managers able to
• identify high performers
• Communicate

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• Reward Behaviors,
• Not Just Results

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Point-based Rewards

• Medical center example
• Points earned by using shift-scheduling software
  and for working shifts

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Recognition

• Attention is a powerful nutrient. It amplifies
  and accelerates the situations on which it is
  focused.
• --Martha Beck

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Workplace Recognition Study

• 38 tangible rewards
• 21 opportunities to learn and grow
• 19 verbal or written praise
• 20 nothing
• 65 of ees b/t 18-34 more likely to leave if they
  dont feel like they are recognized
• Office Team Survey

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Recognition Blunders

• Acknowledging incorrect facts
• Offering token gestures
• Being vague
• Going overboard
• Overlooking contributors
• Office Team Survey

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Praise

• For effort or for ability?
• When not to use it.

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Best practices

• FORTUNE
• 100 Best Companies to Work For

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Best Practices

• Zappos

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Best Practices

• Discovery Communications
• Sprint

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Moving toward Total Rewards

• Meeting with Leaders
• Permission to align rewards with strategy
• Ask for any resources needed to get the project
  going

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Good Data

• Data based planning
• Metrics and benchmarking
• The big ?

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Benchmark Metric Data

• SHRM
• Saratoga Institute
• WorldatWork
• Consulting firms
• Mercer, Hewitt, Hay, Towers Perrin, Watson Wyatt
  Worldwide
• Professional associations
• In-house pay surveys

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HR Metrics for Compensation
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Metric Options for Variable Pay

• Production performance
• Actual change vs. planned change
• Revenue growth
• Return on investment
• Average employee productivity change
• adapted from Mathis and Jackson, Human Resource
  Management, 12th edition, Thompson-Southwest

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Metric Options for Variable Pay

• Sales Programs
• Increase in market share
• Customer acquisition rate
• Growth of existing customer sales
• Customer satisfaction

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Metric Options for Variable Pay

• HR Related Program Measures
• Employee satisfaction
• Turnover costs
• Absenteeism cost
• Workers comp claims
• Accident rates

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Cost and ROI of

• Health and wellness benefits
• Wellness programs
• Recognition programs
• EAPs
• Retirement plans
• Time-off programs
• Stock purchase

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Alignment Strategic Goals Objectives

• Compensation is not an HR program
• Org owns compensation
• Appropriate mix of total reward elements
• Profit sharing Nucor Steel

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AlignmentValues

• Employee Value Proposition
• Rewarding what is valued
• Valuesculturestrategy

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Keys

• Communication
• Personalize
• Win over family when possible

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Questions

• ?????????????????????????????????????????????????
  ??????????????????????????????????????????????????
  ??????????????????????????????????????????????????
  ??????????????????????????????????????????????????
  ??????????????????????????????????????????????

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ResourcesDan Pink

• RSA Animate - Drive The surprising truth about
  what motivates us
• http//www.youtube.com/watch?vu6XAPnuFjJc
• Drive The Surprising Truth About What Motivates
  Us, Riverhead Books, 2009, by Dan Pink
• Twitter _at_DanPink
• http//www.danpink.com/
• https//idonethis.com/

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Resourceswebsites blogs

• http//www.zappos.com/index0.zml
• http//www.ioatwork.com/
• http//www.shrm.org
• http//hrdailyadvisor.blr.com/
• http//danariely.com/
• http//www.inc.com/
• http//blogs.hbr.org/

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Resourceswebinar

• SHRM e-learning webinar
• Aligning Your Compensation Strategy with Business
  Priorities by Stacey R. Carroll, SPHR, Director
  of Customer Service Education, PayScale,
  Seattle, Wash.
• 1.5 strategic CE credit

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ResourcesThe Startup Daily

• Play to Your Strengths
• http//thestartupdaily.com/2012/02/play-to-your-st
  rengths/
• Why Do You Do What You Do?
• http//thestartupdaily.com/2012/02/why-do-you-do-w
  hat-you-do/
• The Magic of the Mundane
• http//thestartupdaily.com/2012/02/the-magic-of-th
  e-mundane/
• The Cost of Focusing on Results
• http//thestartupdaily.com/2011/09/the-cost-of-foc
  using-on-results/
• Benefit from the Success of Others
• http//thestartupdaily.com/2012/02/benefit-from-th
  e-success-of-others/

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Resourcesonline articles

• The Secret Document That Transformed China
• http//www.npr.org/blogs/money/2012/01/20/14536044
  7/the-secret-document-that-transformed-china
• Best Ways to Recognize Employees
• http//www.toiletpaperentrepreneur.com/the-right-a
  ctions/ways-give-employee-recognition/
• The Folly of Stretch Goals
• http//blogs.hbr.org/cs/2012/04/the_folly_of_stret
  ch_goals.html
• How to Set Your Employees Free Reed Hastings
• http//www.businessweek.com/articles/2012-04-12/ho
  w-to-set-your-employees-free-reed-hastings

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ResourcesInc. Magazine online
ResourcesInc. Magazine online

• Why Flexible Hours Inspire Performance
• http//www.inc.com/margaret-heffernan/why-flexible
  -hours-inspire-achievement.html
• Nows a Good Time to Reward Employees
• http//www.inc.com/michael-alter/nows-a-good-time-
  to-reward-employees.html
• How to Keep a Superstar Employee Happy
• http//www.inc.com/jeff-haden/how-to-keep-a-supers
  tar-when-you-have-little-to-offer.html

• Why Flexible Hours Inspire Performance
• http//www.inc.com/margaret-heffernan/why-flexible
  -hours-inspire-achievement.html
• Nows a Good Time to Reward Employees
• http//www.inc.com/michael-alter/nows-a-good-time-
  to-reward-employees.html
• How to Keep a Superstar Employee Happy
• http//www.inc.com/jeff-haden/how-to-keep-a-supers
  tar-when-you-have-little-to-offer.html

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ResourcesHR Daily Adviser

• 10 Incentive Design Mistakes
• http//compensationdailyadvisor.blr.com/?p2001?so
  urceCDAeffort11
• http//compensationdailyadvisor.blr.com/2012/01/10
  -dogooder-acts-that-drive-good-salespeople-to-the-
  competition/

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Resources100 Best

• FORTUNE (magazine) 100 Best Companies to Work For
• The 100 Best issue comes out every year late
  January/early February and includes select data
  on each company and an in depth story on the 1
  company and at least one other that made the list
• http//money.cnn.com/magazines/fortune/best-compan
  ies/

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ResourcesHR Magazine

• Fill Those Unpopular Shifts, 4/2009
• Money Matters in the Hiring Process, 9/2009
• Salaries Looking Up, 10/2009
• Treating Employee Like Customers, 10/2009
• At Work in 2020, 1/2010
• No Good Deed Goes Unrewarded, 1/2010
• May the Sales Force Be with You, 9/2010
• All For Incentives, Incentives For All, 1/2011
• Benefits Choices Educating the Consumer, 3/2011
• Make a Deal,1/2012

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ResourcesBooks

• Mindset The New Psychology of Success,
  Ballantine Books, 2006, by Carol Dweck
• The Progress Principle Using Small Wins to
  Ignite Joy, Engagement and Creativity at Work,
  Harvard Business Review Press, 2011, by Teresa
  Amabile
• The 5 Languages of Appreciation in the Workplace
  Empowering Organizations by Encouraging People,
  by Gary Chapman Paul White, Northfield
  Publishing, 2011

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ResourcesBooks

• 1001 Ways to Reward Employees, Workman Pub.,
  2005, by Bob Nelson
• Instant Influence, How to Get Anyone to Do
  Anything FAST, Little Brown, 2011, by Michael
  Pantalon
• Investing in What Matters Linking Employees to
  Business Outcomes, SHRM, 2009, by Scott Mondore
  and Shane Douthitt