Non-Monetary Rewards: 4.1.3 Value to Employers

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From the course by University of Minnesota

Human Resources Management Capstone: HR for People Managers

110 ratings

University of Minnesota

Human Resources Management Capstone: HR for People Managers

110 ratings

Course 5 of 5 in the Specialization Human Resource Management: HR for People Managers

This specialization provides a robust introduction to the key principles, policies, and practices of human resource management, with a focus on understanding managerial choices and constraints, acquiring and onboarding talent, managing employee performance, and rewarding employees. The capstone project provides learners with the opportunity to apply these key principles and practices to a real-world workplace (including a learner's own workplace if desired). Specifically, the capstone project will involve identifying the key human resources challenges for a workplace--including the most pressing motivational, selection, performance evaluation, and reward issues. And for each of these areas, learners will devise a multi-step action plan for addressing the challenges identified.

From the lesson

Milestone 4: Managing Employee Compensation and Rewards

To reach the final milestone of the capstone project, you will identify and analyze the organization's rewards practices. This includes an analysis of compensation strategy, benchmarking practices, and an analysis of the pay mix. You will receive feedback from others and also review others' work to provide guidance and to help reflect upon their own context.

Base Pay: 1.3.1 Connecting Structure to Strategy3:32

Base Pay: 1.3.2 Job Families and Levels6:06

Base Pay: 1.3.3 Assigning Grades and Ranges8:04

Short Term Incentives: 2.2.1 To Incent or Not to Incent8:39

Short Term Incentives: 2.2.2 Designing Incentives11:01

Long Term Incentives: 2.3.1 Varieties of Long Term Incentives4:45

Benefits: 3.3.1 Shopping for Health Insurance Providers8:00

Benefits: 3.3.3 Shopping for Pension Providers9:19

Non-Monetary Rewards: 4.1.2 Value to Employees7:32

Non-Monetary Rewards: 4.1.3 Value to Employers6:58

Meet the Instructors

John W. Budd
Professor and Director
Center for Human Resources and Labor Studies
Larry Bourgerie
Senior Lecturer
Carlson School of Management, Department of Work and Organizations
Amy Simon
Senior Lecturer
Department of Work and Organizations
Alan Benson
Assistant Professor
Carlson School of Management, Department of Work and Organizations

Hi. It's Mike Davis again.

We're back to talk bout non-monetary rewards.

So far,

I hopefully have made the case about why non-monetary rewards are important and

why every company should think about it as a key part of their total rewards program.

We just went through a segment looking at how valued these benefits are to

employees and what a difference they make.

We're going to now look at more deeply the value to employers, but

we're going to begin by once again revisiting the Total Rewards Model.

Again, this is Zingheim & Schuster's Total Rewards Model,

in their book Pay People Right.

You can find it on the internet, too.

And from their studies, these are the things that they found

when people talk about their jobs and talk about what they like.

They tend to mention various factors that are showing on the spread.

You'd think it would be all about compensation and benefits and

in fact it is to an extent, but it's not in the grand scheme of things.

It's all these other factors combined that people talked about.

So let's go back and think about employers for a second.

What are they doing?

Well first and foremost, they're trying to run a business.

And to do so, they're going to need employees, and

they're going to have to know how to do certain things.

So they're going to have to have certain skillsets, and possibly personality

traits, and they're going to have to know how to do their jobs.

So when it comes around to pay every employer knows you have pay fairly, but

often times what isn't as clear is that compensation itself is not enough.

That you really need, as an employer, to do more.

So again staying with employers they want to make the job and

the company look attractive.

And it's competitive no matter where you are around the world,

employees have choices when it comes to work.

What you want to do is think about how to attract the people who you really want.

And how to make that company look very unique and

special compared to all the other choices.

How are you going to do this?

Again if we go back to the grid,

non-monetary rewards is a great way to do it.

It's hard to do that with just pay.

And if we take another Zingheim & Schuster idea,

they really are big on finding win-win solutions.

And very simply those are wins for the employer, and wins for the employee so

as this non-monetary reward is thought of it works for both sides.

So some examples, and again non-monetary rewards can do a lot of different things.

It can show the values of the company and the owner.

That's often important to people.

It can attract a certain type of employee.

We talked previously maybe the employer wants a lot of part-time

employees to help facilitate flexible work schedules.

You can motivate performance with non-monetary rewards.

You can make yourself look different.

It can be part of building a reputation as the employer.

Or even more importantly,

people might stay because they like what you're doing in this area.

The key here, and it's underscored, money is not always the motivator,

in fact it's often not the best motivator.

So you think how much does this cost?

Well amazingly, most non-monetary benefits don't cost hardly anything, or

the cost is very low.

And think of a simple example I have up here, that a company wants to have a value

of honesty and integrity, it wants to attract into the company people who

value that trait and probably exhibit themselves, so what do they do.

They talk about it.

They recognize people for it.

They make hiring decisions and promotion decisions.

They have an open door policy inside the company to talk about it.

And most importantly, they make sure what they do matches this value.

So as you can see, try to think well,

what would cost a lot about any of those five steps, really not very much.

But if you value that as an employer or

as an employee, huge value and again very little money spent in the process.

So employer of choice is an idea we're going to come back to multiple times, and

smart companies if you think about it, they want a good reputation.

They understand the value of employee word of mouth, the best job candidates

come in the door because other employees have said this is a great place to work.

So being an employer of choice is just the way it sounds,

that when people have choices, they might include or only include you.

So, again, I'm taking some notes here from the Zingheim & Schuster work.

They view a way to tell if you're succeeding here is that applicants want to

work for you, you're getting resumes without having to work very hard, and

you're best, talented people stay with you.

This is an example of a win-win.

It's great for the company, great for the employee.

Now recognition has another kind of important piece to this.

And, sadly it's so easy to do, and it's easy to overlook.

It's a real missed opportunity.

And the thing about recognition of being a company that just prides itself on it,

is there's so many ways to do it.

And, some of the informal methods are the best.

A heartfelt thank-you means a lot.

You might go home and actually say, I got complimented at work today.

I got a big thanks.

Or a celebration of the team that did something big.

We're going to look at an example of this later.

Could be more formal that once a year there's an award program of

a certain kind.

Or it could simply be a contest.

The point is is that employees feel good about this, they feel appreciated.

And if done right it can also drive performance for the company.

So what are the patterns we see here?

The best companies think about total awards more holistically and

their mindset goes to these non monetary rewards that supplement cash pay.

Employers of choice, they treat their employees well.

They have a great reputation and they get a great workforce because of it.

They think about more than just pay and they're very successful.

And the non-monetary rewards help them do it.

Again, it's win-win solutions.

The only thing about this is you've got to be creative.

You can't afford to have narrow thinking.

Think what would make a difference in my workplace.

So far, we've discussed the importance of non-monetary rewards.

We've just looked at the value to employees and employer.

Now we're going to take a deeper dive into three of the main programs that appear in

non-monetary rewards and we're going to start with recognition.

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