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The Manager’s Guide to Rewards: What You Need to Know to Get the Best for—and from—Your Employees

Book Description

A manager who understands the ins and outs of his company's compensation system is more likely to be able to retain his best people, keep them motivated, and ensure that they continue to produce outstanding results. Written by compensation experts at the Hay Group--one of the most respected consulting firms in the world--

The Manager's Guide to Rewards

reveals how to:

* motivate and keep the best people despite company pay limits * get employees to understand the connection between what they achieve and the bonus or salary increases they are paid * use base salary, short and long-term incentives, benefits, perks, and non-monetary rewards more effectively

Decisions about rewards are not just in the hands of HR professionals. This important book shows that managers have more power than they may think to use rewards creatively and keep their most valuable employees happy and productive.

Table of Contents

  1. Copyright
  2. Foreword
  3. Preface
  4. Acknowledgments
  5. 1. Why This Book Is Important
    1. The Problems with Compensation Programs
    2. Compensation to Align with Culture
    3. Total Rewards—It’s More Than Money
    4. The Manager’s Tool Kit
    5. The Structure of This Book
  6. 2. Ensuring an ROI on Your Rewards Programs
    1. What? Me Measure?
    2. Why Organizations Don’t Measure ROI
    3. What Should Be Measured? The Investments
    4. What Should Be Measured? The Returns
    5. An Employee Perspective on ROI
    6. What Can Managers Really Influence?
    7. How Does Improved Performance Increase ROI?
    8. Five Principles for a System of Differentiated Rewards
    9. Summary: A Checklist for Ensuring a Return on Investment in People
  7. 3. The Link Between Rewards and Business Objectives
    1. A Blueprint for Your Rewards Program
    2. Organizational Culture as a Foundation for Rewards Design
      1. The Functional Work Culture
      2. The Process Work Culture
      3. The Time-Based Work Culture
      4. The Network Culture
    3. One Size Never Fits All
      1. A Case Study: Arbella Insurance
    4. The Total Rewards Strategy
    5. From Strategy to Structure
    6. Summary: A Checklist for Designing a Rewards Program
  8. 4. Performance Measures That Motivate
    1. Setting the Goals
    2. Choosing the Right Incentive Measures
      1. It’s All About Alignment
      2. But Money Is a Factor, Too
    3. The Architecture of Your Measurement System
      1. Living Your Values
      2. Having a Rewards Philosophy
      3. Linking Performance with Strategy
    4. Top Down or Bottom Up?
      1. But My Employees Are a Team!
      2. A Framework of Measures
    5. Setting Targets That Motivate
    6. Summary: A Checklist for Performance Measures That Motivate
  9. 5. Getting Employee Commitment with “Total Rewards”
    1. Why Is a Total Rewards Approach So Vital Today?
    2. The Total Rewards Palette
      1. Work Culture and Values
      2. Work Climate
      3. Leadership and Direction
      4. Growth and Development Opportunities
      5. Work/Life Balance
      6. Job Enablement
      7. Recognition
    3. The Links Between the Reward Elements
    4. Developing a Total Rewards Strategy
      1. Step 1: Take Stock
      2. Step 2: Sharpen Your Focus
      3. Step 3: Take Action
      4. Step 4: Measure the Results
    5. Summary: A Checklist for Total Rewards
  10. 6. Putting a Price Tag on Work
    1. The Value of Work
    2. A Work-Valuing Timeline
    3. So What’s Different in the 2000s?
    4. Why Job Content Matters: Two Examples
    5. The Manager’s Need to Know
    6. New Ways of Assigning Value to Work
      1. Job Evaluation
      2. Case Study: Deere & Company
      3. Market Pricing
      4. The Optimal Approach—Job Content Market Pricing
      5. Case Study: JCPenney
    7. Summary: A Checklist for Putting a Price Tag on Work
  11. 7. Base Salary Management: Building the Foundation
    1. How Base Pay Programs Should Work
      1. Individual Job Pricing
      2. Salary Grades
      3. Broadbanding
      4. Case Study: Home Depot
    2. Linking Performance to the Market
      1. Base Pay
      2. Salary Increases
    3. Other Elements of Managing Base Pay
      1. New Hires
      2. Promotions
      3. Demotions
      4. Lateral Transfers
      5. Developmental Moves
      6. Other Pay Actions
    4. Five Key Compensation Challenges
    5. Summary: A Checklist for Managing Base Salaries
  12. 8. Reinforcing Results with Variable Pay
    1. Types of Variable Pay Programs
      1. The Difference Between Bonuses and Incentives
      2. When Discretionary Plans Are the Better Choice
      3. Recognition—A Nonfinancial Reward
    2. Incentives That Motivate
      1. Types of Variable Pay Rewards
      2. The Desired Performance Objective
      3. Rewards Differentiation
      4. Incentives as the Exception, Not the Rule
      5. Case Study: Replacements, Ltd.
    3. Incentives That Encourage Teamwork
    4. Weighted Schedules for the Rewards
      1. Be Careful What You Ask For
      2. The Sweet Spot
      3. Minimum and Prorated Payouts
      4. Unforeseen Outcomes
    5. Getting the Most Out of a Variable Pay Program
      1. Personal Impact Map
      2. Ways to Avoid Common Mistakes
    6. Maintaining the Plan’s Effectiveness
      1. Things to Watch Out For
      2. A Word About Sales Incentives
    7. Final Considerations
    8. Summary: A Checklist for Variable Pay Programs
  13. 9. The Hidden Value of Benefits
    1. Sending the Message to Employees
      1. Health and Well-Being
      2. Financial Support for Benefits
      3. Work-Life Concerns
      4. The Competitive Job Market
    2. Taking Stock of Your Company’s Total Rewards
    3. Different Cultures, Different Needs
      1. Beaumont Foundation
    4. Putting It All Together
    5. Some Success Stories
      1. American Modern Insurance Group
      2. St. Vincent’s Medical Center
      3. Avaya
    6. The Bottom Line on Benefits
    7. Summary: A Checklist for Benefits
  14. 10. Remembering the Management in Performance Management
    1. The Rationale for Performance Management
    2. The Manager’s Role
      1. Planning
      2. Coaching
      3. Reviewing
      4. Rewarding
    3. Clarity in Performance Management
    4. Defining the “What” and the “How” of Performance
      1. The “What” of Performance
      2. The “How” of Performance
    5. Competencies
    6. Using Multi-Rater Feedback
    7. Challenges and Solutions in Measuring Performance
      1. Forced Ranking and Forced Distributions
      2. Managing the Middle
    8. Summary: A Checklist for Managing Performance
  15. 11. A (Career) Path to Employee Satisfaction and Business Success
    1. Grow Your Own Talent
    2. Skills-Job Alignment
    3. The Architecture of Roles
      1. Levels of Work
      2. Nature of Roles
    4. The Role-Type Matrix
    5. Different Competencies for Different Management Roles
      1. Competency Distinctions Across Management Roles
    6. Navigating the New Organizational Landscape
    7. Succession Planning and Career Mapping
    8. Implications for Reward Management
    9. Summary: A Checklist for Managing Career Paths
  16. 12. The Importance of Communications
    1. Managing Expectations
    2. An Opportunity to Gain Employee Trust
      1. Conceptual Complexity
      2. Logistical Complexity
    3. Strategic Planning and Change
      1. Confirming the Change Objectives
      2. Developing the Communications Objectives
      3. Delineating the Target Audiences
      4. Creating the Messages
      5. Picking the Key Messengers
      6. Overcoming the Barriers to Effective Communication or Implementation
      7. Choosing the Right Communications Vehicle to Drive Your Message
    4. Tactical Planning
    5. Implementing the Plan
      1. Discussion Protocols
    6. Summary: A Checklist for Reward Communications
  17. 13. Recognition: The Most Meaningful Reward?
    1. The Prevalence of Recognition Programs
      1. Case Study: Prudential Financial Services
    2. The Power of Recognition
      1. Behaviors to Recognize
      2. Degree of Formality
      3. Eligibility to Receive Awards
      4. Frequency, Size, and Types of Awards
    3. Noncash Awards
      1. Case Study: TDK Electronics
    4. Summary: A Checklist for Recognition
  18. Notes
    1. Chapter 1. Why This Book Is Important
    2. Chapter 2. Ensuring an ROI on Your Rewards Programs
    3. Chapter 3. The Link Between Rewards and Business Objectives
    4. Chapter 4. Performance Measures That Motivate
    5. Chapter 5. Getting Employee Commitment with “Total Rewards”
    6. Chapter 6. Putting a Price Tag on Work
    7. Chapter 7. Base Salary Management: Building the Foundation
    8. Chapter 8. Reinforcing Results with Variable Pay
    9. Chapter 9. The Hidden Value of Benefits
    10. Chapter 10. Remembering the Management in Performance Management
    11. Chapter 11. A (Career) Path to Employee Satisfaction and Business Success
    12. Chapter 12. The Importance of Communications
    13. Chapter 13. Recognition: The Most Meaningful Reward?
  19. About the Authors
  20. About Hay Group