Head Running: - Total Rewards Systems Proposal

Total Rewards Systems Proposal

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HRM 533- Total Rewards
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Head Running: - Total Rewards Systems Proposal

Abstract
This paper is provided to create, organize, and manage a total rewards program
for an insurance company. First, it indicates the requirement of a total rewards system for
the company. Then, it formulates a competitive strategy and explains it. Since the
communication of a strategy is as important as the strategy itself, the paper includes a
communication plan of the strategy. And last but not least it studies devising a
competitive pay structure.
1. Create a brief overview of the company requirements for a total rewards system.
Company A is a holding company that provides financial protection, insurance
and asset management services that employs 20,000 employees in 17 different countries
in Europe, North America and Asia Pacific (The Datamonitor Group, 2011). There are
2,000 management-level individuals who speak a variety of languages. The company
employs diverse individuals who are governed by multiple regulatory environments.
Company As business finds its primary source of strength in human
competencies. The company believes in the power of talented and dedicated employees to
make difference on the quality of the service delivered at the market. The company aims
at gaining the preference of its customers and shareholders as well as its employees.
Because the employees are at the core of purpose, the company intends to build its
collective success around a relationship in which the needs of itself and of its employees
are mutually satisfied.
The company needs a comprehensive total rewards strategy because it wants to:
* inspire and empower employees who continuously seek and adopt better ways
to do his or her job to achieve their best.

Head Running: - Total Rewards Systems Proposal

* be competitive on the market with recruiting the best workforce. The

expectation from employees is performing at high standards and aiming to exceed
customer expectations.
* built a learning culture which fosters personal development, professional
mobility, openness to change and willingness to learn.
* have employees who value individuals and their diversity, respect others and
openly share information, knowledge and views to help colleagues succeed.
* act in line with its values of professionalism, innovation, pragmatism, team
spirit and integrity.
2. Formulate a total rewards strategy to encompass the fundamentals of
compensation and the regulatory environments.
A well-articulated compensation philosophy drives organizational success by
aligning pay and other rewards with business strategy. It provides the foundation for plan
design and administration and anchors current and future plans to the company's culture
and values (Kaplan, 2006, p.32). Recognizing and rewarding achievement is the
cornerstone of the company As compensation philosophy. The mission of the company is
to attract, select, place and promote all individuals based on their qualifications. The
company believes that performance-based compensation helps attract, develop and retain
talented professionals. In addition to base pay which based upon local market conditions
and targeted to be above market, the company provides the following types of potential
compensation to reward performance:
* Annual Merit Increases (all exempt and nonexempt salaried employees are
eligible)

Head Running: - Total Rewards Systems Proposal

* Annual Promotions (all exempt and nonexempt salaried employees are eligible)
* Annual Spot Bonuses (all exempt and nonexempt salaried employees are
eligible)
* Short-Term Incentive Compensation (all exempt and nonexempt salaried
employees are eligible)
* Long-Term Incentive Compensation (all exempt salaried employees are eligible)
Because of the compensation programs must adhere to specific laws designed to
provide fairness in how employees are paid, the compensation system of the company
sticks to laws and all of the regularities of the laws are followed well by the company
(Worldatwork, 2007). There is no discrimination based on race, colour, religion, sex,
pregnancy, national origin, and disability at hiring, firing or promoting. There are
regulations about working conditions and workplace safety. Nonexempt employees
wages, overtime pays are in unison with FLSA regulations. There is no child labour in the
company.
Besides the compensation there are comprehensive benefit programs that the
company offers to its employees which reward them for their hard work. The programs
give them the opportunity to accumulate wealth, and provide for their protection and
well-being. There are:
* Health insurance (all exempt and nonexempt salaried employees are eligible)
* Vision and dental insurance (all exempt salaried employees are eligible)
* 401 (k) plan (all exempt and nonexempt salaried employees are eligible)
* Disability plans (all exempt and nonexempt salaried employees are eligible)
* Adaption programs (all exempt salaried employees are eligible)

Head Running: - Total Rewards Systems Proposal

* Educational assistance programs (all exempt salaried employees are eligible)

* Life insurance (all exempt and nonexempt salaried employees are eligible)
* Day care service (all exempt salaried employees are eligible)
3. Explain the advantages of the total rewards strategy you are proposing and how it
might satisfy the employees needs.
The purpose of this strategy, like every other rewards strategy, is to enhance
recruitment, retention, and performance levels within the company. The company wants
to be the first choice of potential employees to work which also affects its reputation in a
good way. The company makes an emphasis on its wide benefits packages to show the
value that it gives its employees as well as its compensation strategy. It drives
organizational success through greater talent attraction, engagement and retention.
I believe that this strategy is helpful to create employee commitment. Employee
commitment comes from employees who believe their future is tied to that of the
organization and their willingness to make personal sacrifices for the organization. The
more the company is dedicated to taking care of its employees, the more likely it is that
the employees will take care of the organization (O. Ferrell, Fraedrich, and L. Farrell,
2011, p.18). With the strategy, employees will feel their selves and their families valued
by the company. Thus, they will have intellectual and emotional attachment to the
company. It will reduce employee turnover within the organization. They will feel their
selves as a member of the company. Employees will feel that their work contributes to the
success of the organization and have a clear line of sight between their roles and company
objectives. They will want to do their best, which will be increased profitability, and

Head Running: - Total Rewards Systems Proposal

recommend their company as a good place to work which will affect the reputation of the
company.
4. Determine the key communication components of the total rewards system.
A competitive and desirable total rewards system will not be effective if
employees and prospective employees dont know what is in it. This makes
communication of the system just as important as the system itself (Nelson, 2010, p. 4).
Before the company starts to communicate the strategy with employees, it needs to figure
out some issues, like:
* How to communicate with different level of employees? (exempt- nonexempt)
* When to communicate?
* Which media should be preferred?
* Who will communicate with employees?
After the company clarifies its mind about these issues, it can start to
communicate the strategy.
There will be two teams to communicate different levels of employees. Because
of a need of different communication styles and media, team 1 will communicate all
exempt employees, while team 2 is taking care of nonexempt employees. Team 2 will
give detailed information to nonexempt employees about the strategy during the
recruitment process. They will make the emphasis on implementing of the strategy and
the policies. Team 1 also gives detailed information to exempt employees during the
recruitment process but they will make emphasis on tailored rewards to motive them.
Also both team 1 and team 2 will be provided written explanation of the strategy
to both exempt and nonexempt employees. Additionally, there will be audio about the

Head Running: - Total Rewards Systems Proposal

strategy for nonexempt employees. There is a toll free lines are available to guide both
exempt and nonexempt employees about the using of benefits.
Additionally, advisors will be available at the company for existing employees
who wants to tailor the received benefits. For example, an employee who just had an
accident and had some disabilities can start to benefit disability programs on guidelines
of the companys advisors. Also, the job of those advisors is to create a career path for the
employees and guided them who want to have reimbursement opportunities as well as
providing trainings within the company. So, employees can have verbal communication
with them whenever they need.
When changes happen on one of the component of the program, the company
gathers employees in a conference room to let them know about the changes. Also
depends on the level of the employees it provides e-mails or flyers about the changes.
Communication at the every stage of the program is too important for the company.
5. Indicate your strategy for devising a competitive pay structure.
First of all, to build a competitive pay structure the company has to develop an
accurate description of the jobs to be evaluated. The job description is used to ensure
accurate comparison with published market surveys and for internal comparisons with
other jobs within the company. The job description should state the reason the job exists
and list the key duties and responsibilities. It should spell out the qualifications needed
for competent performance of the job duties, including educational and experience
requirements, skills and abilities needed to do the job, as well as any physical demands
and environmental exposures encountered (EarthLink Inc., 2012).

Head Running: - Total Rewards Systems Proposal

External equity is more important for the company than internal equity. Thus, the
process of collecting data via surveys is really important process for the company. At the
hiring process the rate is higher than market but over time, when a commitment was
gained from employees over years with helping of benefits of the company, the rate is
kept in line market price during the seniority years of employees. So, the minimum salary
of the jobs is higher than market but midpoint and maximum are in unison with the
market. Also the company considers internal equity somehow. There are different salary
minimum, midpoint and maximum ranges for some nonexempt jobs according to the
importance of the department that the job performed within the organization.

Head Running: - Total Rewards Systems Proposal

References
EarthLink Inc. (2012). Sample compensation study. Retrieved February 8, 2012, from
http://home.earthlink.net/~hrpartners1/id12.html
Ferrell, O. C., Fraedrich, J., & Ferrell, L. (2011). Business ethics: ethical decision making
&
cases. Mason, OH: Cengage Learning
Kaplan, S. L. (November 1, 2006). Answer these questions for a sound compensation
philosophy. Business source complete. (Accession No. 23652229) Retrieved February 7,
2012, from, https://web-ebscohost-com.libdatab.strayer.edu/ehost/pdfviewer/pd fviewer?
sid=57b31a86-3d7d-43e1-a86f-705a41503b34%40sessionmgr15&vid=11& hid=123
Nelson. A. H. (2010). Total rewards: its more than just a paycheck! Total Rewards
Instructors
Manual. Retrieved February 7, 2012, from, http://www.shrm.org/Education/hr
education/Documents/Nelson_Total%20Rewards%20Its%20More%20Than%20Just
%20a%20Paycheck!_IM_FINAL.pdf
The Datamonitor Group, (2011, October 1). AXA SWOT analysis. Business source
complete.
(Accession No. 67304364) Retrieved February 7, 2012, from, https://web-ebscohostcom.libdatab.strayer.edu/ehost/pdfviewer/pdfviewer?vid=6&hid=123&sid=57b31a863d7d-43e1-a86f-705a41503b34%40sessionmgr15
Worldatwork (2007). The worldatwork handbook of compensation, benefits & total
rewards.
Hoboken, NJ: John Wiley & Sons, Inc.

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