the critical link: global total rewards culture, strategy ...concerned about corporate culture •...

The Critical Link: Global Total

Rewards Culture, Strategy and Your

Bottom Line

1

CEO’s and CHRO’s are Increasingly

Concerned about Corporate Culture

• Focus on creating greater

alignment between culture

and company strategy

• 92% agree that organizational

culture significantly affects

financial outcomes, placing

culture at the top of the CEO

and CHRO agendas

2CEB, 2016

What is Culture?

• It’s simple “the way

we do things around

here”

• A set of shared,

subconscious

assumptions and

tacit beliefs

3

Organizational Culture and Total Rewards

• Highly successful companies have

strong unique cultures

• Support employees to achieve

strategic objectives and enhance

organizational performance

• Total rewards systems design how

individuals are rewarded and

communicate an organization’s

beliefs and values

• Key to understanding organizational

culture

4

Total Rewards Model

• Compensation

• Benefits

• Performance management

• Recognition

• Talent Development

• Work-Life Effectiveness

“The behaviors companies reward

and recognize (via financial and

nonfinancial rewards) are the

behaviors more likely to be

demonstrated by employees”

CEB, 2016

Culture has an Impact

Research has shown

the powerful impact on

performance and long-term

effectiveness of

organizations

6

If You Don’t use Culture,

Culture will Use You

• If you’re not aware, it will

shape you

• Human beings Copy,

Coach, and Correct each

other to fit into the group

• So make sure Culture

works for you, instead of

against your necessary

change

7

Competing Values Culture Framework

8

Survey Questions• The Organizational Culture Assessment Instrument (OCAI)* was used to

identify the dominant culture of your organization based on the Competing Values Framework (CVF)

• Three open-ended questions were examined, organized, and coded into total rewards categories or broad themes

• Question 1: The most important characteristic or attribute that makes my organization's total rewards strategy effective is:

• Question 2: The one or two characteristics or attributes that need to be changed to improve the effectiveness of my organization's total rewards systems are:

• Question 3: Success of the total rewards system at my organization is measured by:

9* OCAI developed by Cameron and Quinn (2006)

Organizational Culture Type Survey Results

10

Culture Type Distribution

Clan 50%

Hierarchy 5%

Market 35%

Adhocracy 10%

Clan Culture – 50%

• People-oriented, friendly

• Leader: facilitator, mentor,

team builder

• Value: commitment,

communicate, develop

• Effectiveness: development

and participation

11Cameron and Quinn, 2006

Total Rewards Major Themes

Clan Culture

• Relationship with management and peers – 25%

• Personal growth and development – 25%

• Performance management – 25%

• Communications - 13%

• Organizational Culture – 6%

• Work that matters – 6%

• Job satisfaction – 6%

• Compensation and benefits – 13%

• Financial security – 13%

12

How success is measured

Clan Culture

• Retention – 25%

• Employee satisfaction – 17%

• Individual development and growth – 17%

• Attraction – 8%

• Employee stress – 8%

• Cost – 8%

• Company performance – 8%

• Not measured – 8%

13

Clan CultureTotal Rewards Considerations

14

Rewards Emphasis

• Respect the organization’s traditions

• Focus on interpersonal and

employee needs

Base Pay

• Competitive or above (caring family)

• Pay reductions rather than layoffs

Bonus

• Team-based

Benefits

• Inclusive and competitive; flexible

Performance and Recognition

• 360 degree feedback

• Competencies and values rather

than numeric ratings

• Group recognition

Development and Career Opportunity

• Individual and team important

Work-Life

• Important to take care of family

Market Culture – 35%

• Results-oriented, competitive

• Individuals are competitive and goal-

oriented

• Leader: hard driver, competitor,

producer

• Value: market share, goal

achievement, profitability

• Aggressively competing and

customer focus



Market Culture

• Compensation and Benefits – 36%

• Link pay and performance – 18%

• Communication – 9%

• Career development – 9%

• Flexibility – 9%

• Job satisfaction – 9%

16

How is Success Measured

Market Culture

• Retention – 40%

• Exit interviews – 20%

• Cost – 20%

• Not measured – 20%

17

Market CultureTotal Rewards Considerations

18

Rewards Emphasis

• External market focus

• Emphasis on individual performance

• Earn rewards based on achieving

agreed-upon goals

Base Pay

• Competitive with market

• Differentiate based on performance

rather than seniority

Bonus

• Individual/company performance

Benefits

• Employees take greater

responsibility


• High performance standards that

differentiate individual performance

• Goals and expectations

• Spot awards and individual

recognition important


• Individual development

• Use of “stretch” assignments

Work-Life

• Important for recruiting

• Employee resolves with manager

Adhocracy culture – 10%

• Dynamic, entrepreneurial

• Leader: innovator, visionary,

entrepreneur

• Value: innovation, agility,

transformation

• Innovativeness, vision and

new resources



Adhocracy culture

• Alignment with future business/growth

strategy – 40%

• Work-life balance – 20%

• Respect for employees – 20%

• Pay for performance – 20%

20


Adhocracy culture

• Company performance – 50%

• Cost – 50%

21

Adhocracy CultureTotal Rewards Considerations

22

Rewards Emphasis

• Attract creative individuals who can

take innovation to next level

Base Pay

• Above market based on individual

talent

• Skill-based pay a consideration

Bonus


• Patents/innovation

Benefits

• Flexible and latest innovations


• Support innovation

• System encourages mistakes

• Punishes inactivity

• Recognize and celebrate success


• Symposiums and forums

• Tools, technology, and systems to

support individual important

Work-Life

• Flexibility is important

Hierarchy culture – 5%

• Controlled, structured

• Leader: coordinator,

monitor, organizer

• Value: efficiency,

consistency, timeliness,

uniformity

• Control and efficiency and

capable processes


Hierarchy CultureTotal Rewards Considerations

24

Rewards Emphasis

• The reward systems respect the

hierarchy and the need for a

predictable and secure environment

Base Pay

• Competitive

• Well-defined procedures important

Bonus


• Targets support hierarchy

Benefits

• Traditional with focus on long-term

job security to maintain a smooth-

running organization


• Highly structure performance

management systems

• Formal recognition plans with well-

defined criteria

• Service awards


• Important for advancement within

the structure

Work-Life

• Not highly valued – slow to adopt


Hierarchy Culture

25

• Employee retention – 50%

• High bonus payout – 50%

Questions

26

the critical link: global total rewards culture, strategy ...concerned about corporate culture •...

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