Total Rewards Programs - Evaluation and Considerations

May 2004

 

Program

Advantages

Disadvantages

Considerations/Notes

Cash Recognition

Bonuses awarded to individuals or teams for exceptional performance.

 

Employees are rewarded at the time of exceptional performance, which allows strong connection between performance and reward.

 

Managers can be accused of showing favoritism.

 

May be used inconsistently across Departments (i.e., criteria and general application).

Need to provide set of standards for acknowledging, rewarding and reinforcing exceptional performance through training, clear policy/procedures, and coaching.

 

Recommend Departments create specific criteria/policy based on County policy framework.

 

Give managers tools and means to provide rewards in a timely manner.

 

Key question: Funding and administration structure yet to be defined – centralized or decentralized structure.

Non-cash Recognition

Rewards which may include: time off, gift certificates, plaques, luncheons, senimar/conference, trinket (mug, pen, etc.) event tickets, volunteer opportunities, etc. awarded to individuals or teams for exceptional performance.

 

Employees are rewarded at the time of exceptional performance which allows connection between performance and reward.


Cost effective.

 

Managers can be accused of showing favoritism.

 

May be used inconsistently across Departments (i.e., criteria and general application).

 

 

Need to provide set of standards for acknowledging, rewarding and reinforcing exceptional performance through training, clear policy/procedures, and coaching.

 

Recommend Departments create specific criteria/policy based on County policy framework.

 

Give managers tools and means to provide rewards in a timely manner.

 

Needs to be tailored to the individual preferences of employees.

 

Key question: Funding and administration structure yet to be defined – centralized or decentralized structure.


 

 

Program

Advantages

Disadvantages

Considerations/Notes

Skill/Competency Differentials

Stipends for attaining job-related skills, such as licensing, certifications, or completion of formalized training that add value to a position.

Specific, specialized skills that improve ability to perform job are recognized and rewarded.

May be difficult to identify specific skills for all jobs.  Some departments will be easier than others to define the set of skills and competencies.

May not be applicable to all Departments.

 

Currently – Police and ECC have skill based pay programs.

 

Skill stipends and broad-banding will need to be closely integrated so that individuals are not rewarded via a stipend and advancement in the [ay scale for achieving the same level of professional growth.

Broadbanding

A compensation and classification system that provides greater flexibility for career and skill development by grouping jobs into wide pay bands.

Encourages and rewards individuals for learning and using new skills needed and valued by the organization.

 

Provides career development opportunities and lateral mobility.

 

Reduces administration of job classifications and reclassifications.

 

Managers have more flexibility in assigning work without regard to job titles.

 

Change basis for pay progression from longevity to performance value-added.

 

Less emphasis on salary grade and more emphasis on individual and team contributions.

 

Increased organizational flexibility.

Requires extensive communication and training.

 

Results in fewer vertical promotional opportunities.

 

Makes it more difficult to establish external pay equity due to lack of salary data for broader job categories.

 

Managers can be accused of showing favoritism.

 

 

Requires effective performance management and career development system.

 

Requires extensive planning, careful design and top commitment.

 

Skill stipends and broad-banding will need to be closely integrated so that individuals are not rewarded via a stipend and advancement in the [ay scale for achieving the same level of professional growth.

 

Suggested to pilot this program first before full deployment.

 


 

 

Program

Advantages

Disadvantages

Considerations/Notes

Merit Pay

Evaluating options to replace the current merit formula, which is a formula that includes:

1) Employee’s performance evaluation rating,

2employee's salary in relation to the midpoint of their pay grade,

3) Merit pool percentage increase,

4) Available funding. 

 

Current plan allows for a fixed amount in the budget.

 

Current plan is complicated and not understood by employees or managers.

 

Current plan does not adequately differentiate among performance levels.

 

Current plan results in a variable merit pool every year, so employees do not know the potential reward commensurate with each performance level.

Design of pay progression should take into consideration communication and administrative ease.

 

To effectively incorporate performance into pay progression, the program must be fully funded.

 

 

 

 

 

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