Innovative Reward Systems for the Changing Workplace

Copyright......Page 5
Contents......Page 7
List of Figures......Page 9
Foreword to the First Edition......Page 11
INTRODUCTION What This Book Will Do for You......Page 15
PART I The Fundamentals of Effective Reward Systems......Page 21
 CHAPTER 1 Why You Should Be Concerned about Reward Systems......Page 23
Understanding the Problem......Page 25
Searching for the Answer......Page 28
Rewards Are More Than Just Pay......Page 29
What Is the Organization to Do?......Page 34
CHAPTER 2 How Rewards Work and Why They Sometimes Fail......Page 39
The Importance of Understanding the Reasons Why......Page 40
Business Success Depends on Systems That Influence Behavior......Page 41
Using Sciences to Understand Behavior......Page 42
A Model for Understanding the Factors That Influence Human Behavior......Page 45
How Consequences Affect People......Page 48
The Purpose of Reward Systems......Page 49
Types of External Consequences......Page 50
Making Rewards an Effective Positive Consequence......Page 52
Putting Principles into Practice......Page 55
CHAPTER 3 Align Rewards with the Organization ’s Strategy......Page 57
The Emergence of Structured Compensation Systems......Page 58
The Shift from Hierarchy to Team......Page 59
The Shift in Compensation from Status to Results......Page 60
The Transition from Teams to Networks......Page 61
Compensation Shifts from Productivity to Creating Value......Page 62
A Model for Understanding What Influences Organizational Performance......Page 63
Transforming Rewards from Programs to Strategy......Page 67
Setting the Strategy and Actions That Are Key to Success......Page 68
People Implement Strategy......Page 70
CHAPTER 4 Create Customized, Systematized, and Personalized Rewards......Page 75
Steps to Developing the Reward Strategy......Page 76
1. Determining Where to Focus the Reward Strategy......Page 78
2. Defining What the Organization Needs to Succeed......Page 79
3. Determining What People Want......Page 80
4. Selecting the Programs That Fit Strategically......Page 83
5. Developing the Strategic Plan for Total Rewards......Page 86
Reward Strategy Case Studies......Page 87
Summary......Page 93
CHAPTER 5 Be Careful What You Measure and Reward......Page 95
Traditional Approaches to Performance Measures......Page 96
Developing a New Purpose for Performance Measures......Page 99
Developing Performance Measures That Link with the Strategy......Page 100
Developing Performance Measures That Focus on Customers......Page 102
The Why and How of Performance Measures......Page 104
When to Use Results and When to Use Process......Page 106
What It Takes to Make a Performance Measure Meaningful......Page 108
The Types of Performance Measures That Make a Difference......Page 110
How to Make Performance Measures Meaningful......Page 114
Summary......Page 117
PART II Implementing Innovative Reward Strategies......Page 119
CHAPTER 6 Make Salaries a Defining System of the Organization......Page 123
Overview of Traditional Base Pay Systems......Page 124
The Need for a Structured Pay System......Page 126
How Salary Programs Usually Work......Page 128
Design and Market Pricing Techniques......Page 130
What Is Wrong with This Process?......Page 132
Applying the Success Criteria: STRIPE......Page 135
Redefining the Purpose of Base Salary Programs......Page 138
CHAPTER 7 Designing Base Pay: Choose Your Approach Wisely......Page 141
Market-Based Career Development Model......Page 142
Use of Core Values to Determine Job Importance......Page 145
Pay for Competencies Employed (PACE)......Page 148
Team Performance–Based Salary Increases......Page 152
Variable Merit Pool......Page 153
Summary of Alternatives to Salary Programs......Page 155
CHAPTER 8 Manage Performance Instead of Appraising It......Page 157
Background of Performance Management......Page 158
The Purpose and Objectives of Performance Management......Page 161
Best Practices in Performance Management......Page 164
A Process for Developing a New Approach......Page 172
Summary......Page 188
CHAPTER 9 How Variable Pay Connects the People and the Strategy......Page 191
Types of Variable Pay Plans......Page 192
Primary Advantages and Issues......Page 195
What Is Wrong with This Process?......Page 198
Understanding the Value and Impact of Variable Pay Plans......Page 201
Seven Key Factors for Assessment......Page 202
CHAPTER 10 Design Variable Pay Plans with a Difference......Page 209
Step 1: The Purpose of the Program......Page 212
Step 2: Performance Measures......Page 214
Step 3: Payout Mechanisms......Page 216
Step 4: Payout Opportunity......Page 225
Step 5: Eligibility......Page 230
Step 6: Funding Sources and Return on Investment......Page 231
Step 7: Special Issues......Page 233
Step 8: Program Implementation and Management......Page 237
Assess the Risks versus Rewards......Page 239
Summary......Page 240
CHAPTER 11 Make Recognition Strategic and Special......Page 241
What Can Be Learned from This Story?......Page 243
Review of the Principles of Reinforcement......Page 244
Success Criteria for Recognition Management......Page 246
Types of Special Recognition......Page 248
Employee Recognition......Page 250
What’s Wrong with This Process?......Page 252
Spot Bonuses......Page 254
Team Celebrations......Page 258
Suggestion Systems......Page 262
What’s Right with This Picture?......Page 266
The Guiding Principles for Making Recognition Special......Page 268
Summary......Page 271
CHAPTER 12 Take Stock of Your Options with Equity......Page 273
Assess the Alignment of Equity-Participation Plans......Page 274
Background on Equity Compensation......Page 275
Overview of the Key Terms and Basic Types of Equity Programs......Page 277
What’s Wrong with This Process?......Page 282
Summary......Page 291
PART III Putting Rewards into Practice......Page 293
CHAPTER 13 How to Use the Right Rewards for the Firm’s Stage of Development......Page 295
“Let’s Make a Deal” for Rewards in a Startup Company......Page 296
Rewards That Accelerate the Growth of Emerging Companies......Page 299
Rewards That Sustain Market Leadership......Page 301
Renewing and Transforming the Organization in Crisis......Page 305
Rewards for Organizations Seeking Continual Change......Page 312
Building a Culture That Thrives on Change......Page 316
CHAPTER 14 Transform Rewards from Entitlement to Achievement......Page 319
Implementing a New Reward Strategy—How to Make It Work......Page 321
Implementing Change So That Results Are Achieved......Page 326
Illustrations of Changing Reward Systems......Page 330
Lessons to Be Learned from Successful Change Efforts......Page 335
CHAPTER 15 Ideas You Can Use and Those You Should Avoid......Page 341
Base Salary: Try These Ideas......Page 342
Base Salary: Avoid These Pitfalls......Page 343
Performance Management: Try These Ideas......Page 344
Performance Management: Avoid These Pitfalls......Page 346
Variable Compensation: Try These Ideas......Page 347
Variable Pay: Avoid These Pitfalls......Page 349
Performance Recognition: Try These Ideas......Page 350
Performance Recognition: Avoid These Situations......Page 351
Equity-Based Programs: Try These Ideas......Page 352
Equity-Based Programs: Avoid These Issues......Page 354
Building a Bridge from Here to There......Page 355
CHAPTER 16 Take Your Workplace to the Next Level......Page 357
The Pressures for Change......Page 358
Creating the Achievement Workplace......Page 361
The Primary Purpose of Reward Systems......Page 363
What Makes Rewards Work......Page 364
Integrating Reward Systems into the Organization......Page 365
Summary: Guiding Principles......Page 367
Thoughts about the Winds of Change......Page 373
Notes......Page 375
Bibliography......Page 381
Index......Page 389
About the Author......Page 400