LINKING STRATEGY AND REWARD

Cathy Hendry

WHAT WE WILL COVER TODAY

+ Introduction to the Total Rewards Model

+ Key elements to a Reward Strategy

+ Insight into pay and benefits in the sector

WorldatWork Total Rewards Model

Remuneration

“ Making a Difference”Strategies to attract, motivate and retain employees

Compelling Future

Vision and Values

Organon image & reputation

Development & career opportunities

Community focus

Employment brand

Pay and Rewards

A rewards framework across Organisation that

reinforces high performance

recognises achievement

is transparent, fair and consistently applied

Total remuneration

Benefits

Recognition & celebration

Engaged Staff

Positive culture

People focus

Leadership

Colleagues

Trust & commitment

Open communication

People Performing Positively

Performance management at all levels

Achieving Results

Living the Values

Development & training

Career enhancement

Example Total Rewards Framework

THE REMUNERATION FRAMEWORK

Context: Remuneration and Rewards

Pay structure options

Simple job matching

• E.g. match to #212 Financial Acct. Survey A

Enhanced job matching

• E.g. match to average of Financial Acct, Survey A; Group Acct, Survey A UQ; Qual Acct, Survey B UQ

Broadbanding / classification

• In this model jobs are assigned to bands using descriptors for each band

Banding JE Based

Narrow grade structure

Job evaluation points

• e.g.

• 150 pts = $31,400

• 151 pts = $31,500

• The points in this model are based on job evaluation total points (sum of points in all factors)

F Top Executive

ESenior Management

Snr Prof/Specialist

DMiddle Management

Professional Advisor

CSupervisory

Technical Specialist

B Technical Admin

Skilled Operator

A Clerical/ Semi-Skilled

Jobs assigned to bands

based on points

e.g. 150-160 e.g. 100-200

+ Understand your relevant markets

+ Identify appropriate sources for information

+ Understand the market information

+ Don’t hard wire market linkage into policy or

employment agreements

Link to external market

A Balancing Act

MARKET RATES AFFORDABILITY

Clear Vision / Mission

• Clearly articulated purpose

• Strategic Plan

Robust Business Planning

• Annual business plan developed from strategic plan

• Balanced scorecard goals

Cascaded Goals and Objectives

• Clearly articulated expectations (results and competencies)

• BU, team and individual

Proactive Performance Management

• People Management

• On-going coaching

• Consequences of performance or non-performance

• Exit?

Rewards for Performance

• Pay, Recognition, Promotion

• Justifiable / defensible decisions based on performance evidence

• Differentiated for highest performing individuals

Linking Pay to Performance

IDEAL CULTURE

(empowered workforce, values-based, trusting, transparent, credible, responsive)

© 2016 Strategic Pay Limited

HOW DOES THE NFP SECTOR PERFORM WHEN IT COMES TO REWARD?

0

100

200

300

400

500

600

700

FR

NZ

D T

housands

General Market

Private Sector

Public Sector

Not for Profit

General staff Mid management Snr management CEO & Snr Exec200 – 400 pts 400 – 800 pts 800 – 1200 pts 1200 – 1600 pts

Actual Pay Practices: Sectors

Source: NZ Remuneration Survey Sep 2016 / NFP 2016

28%

-11%8%

-6%

-13%

73%

65%

68%

62%

67%

78%

48%

76%

General Market

Not for Profit

Top Benefits Offered 2015/16

(48%)

Flu Vacs

Tool of trade vehicle

Prof Ass Fees

Car Park

Work / Life Balance Initiative

98% NFP RESPONDENTS OFFER

SOME FORM OF WORK/LIFE

BALANCE INITIATIVE

COMPARED TO ONLY

82% GENERAL MARKET

ORGANISATIONS

Turnover

Voluntary Turnover (median)

12.3% NFP Market

13.1% General Market

13.9% Private sector

12.0% Public sector

Involuntary Turnover (median)

0.5% NFP Market

1.9% General Market

2.3% Private sector

1.8% Public sector

Source: HR Metrics Survey2016

Absenteeism

Average # days lost to absenteeism (median per employee)

3.0 days NFP Market

4.0 days General Market

4.0 days Private sector

5.0 days Public sector

Overall number of days lost per year (median)75 days NFP Market

294 days General Market

327 days Private sector

708 days Public sector

Source: HR Metrics Survey 2016

Final Thoughts

+ Don’t forget to communicate your policies

+ Consider Transparency in the context of your

organisation.

+ Fairness and Equality are key

32%

11%

3%

20%

13%

5%

5%1,175

Organisations

168,537Employees

46% Private

34% NFP

20% Public

OUR DATABASE

3%

4%

2%

2%

THANK YOU FOR YOUR TIME

Thanks for joining us!

QUESTIONS OR COMMENTS?