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A total reward philosophy (TRP) refers to a system that provides beneficial, developmental and monetary rewards to workers who accomplish specific goals set out in the organization. The strategy is a combination of benefits and compensation with opportunities for personal growth inside a motivated work environment. A TRP translates an organizations values, strategy, and vision into a framework that acts as a guide to the design and decision making of short and long-term incentives, base salary, benefits, and recognition. For organizations to achieve their financial objectives and programs, they must attract, retain, support and motivate a competent workforce using available flexibility and resources. Firms reward workers who demonstrate results and capability which supports organizational goals and objectives to achieve the objective. However, TRP must be based on the organization's ability to pay.
The value of TRP is high to an employer because of the wide variety of factors that comprise it. In addition to monetary compensation, rewards may include recognition and incentives that are non-cash. The rewards are valuable even though there is no enormous cash outlay involved. When employees are motivated, they exhibit increased productivity benefiting the employer. They also develop a sense of ownership and trust towards the organization and therefore become self-driven. As a result, there is reduced need for supervision as workers perform their tasks with passion. Satisfied workers are also less likely to resist changes in the organizations since they trust their employers. Another important benefit of TRP to employers is reduced employee turnover. Employers, therefore, minimize the chances of losing highly qualified employees to competitors that would reduce a firm’s competitive advantage and associated cost of recruiting and hiring other workers.
How Total Rewards Impacts Employer Branding, Recruiting and Retention
In the contemporary business environment that is inherently volatile, firms should be able to harness values associated with a defined employer brand as a competitive advantage. Employer branding refers to the way a firm markets itself both existing and potential employees. Other than ensuring the engagement of workers to their work, employer brand can be used to deliver more positive customer experience. A strong employer brand links a firm's human resource policies, people strategies, and values to the company’s brand. For example, Malmaison group and hotel du Vin provides employee benefits like feet treatment and shopping vouchers. The benefits support the employers brand because the workers feel looked after and therefore respond by expressing undivided attention to their work. At tw telecom, the firm’s recognition program aligns with employer branding thereby providing opportunities for employees to recognize their fellow who demonstrate values of the company which underpins the brand (CIPD, 2010).
Decision making based on short-term results pose negative long-term impacts on organizational outlook and employee retention. Development of stronger incentive packages and benefits go a long way towards retaining and recruiting employees. Total rewards benefit recruiting employers by enhancing the ability to attract and hire highly qualifies and experienced candidates. For example, in late 2006, the crown estate company was experiencing recruitment problems because their reward systems did not reflect the job market at the time. Upon the intervention of Innecto firm that aided in the development of a total reward scheme, the Crown Estate was able to recruit with no difficulties in two years (The Crown Estate, N.d.). In competitive job markets, a total reward is a precious tool for employers. The recruitment process is the first opportunity for an employee to form an opinion of a company where candidates who get a negative experience during the recruitment phase never forget it but instead associates it with all other adventures in the organization going forward. Total reward also impacts employees job satisfaction where contented employees are less likely to seek alternative employment thereby promoting retention of employees (Bussin, 2018). For example, in a research carried out in higher institutions of higher education in Pakistan, the results indicated that there existed a strong relationship between total rewards and employee retention (Akhtar et al., 2015).
Anadarko Petroleum Total Reward Program
Anadarko Petroleum Company values the employees and strives to make them have peace of mind knowing that their compensation and benefits programs allow them to provide security not only for themselves but also for their families. The organization offers one of the most comprehensive total rewards packages including many benefits programs funded by the firm. The advantages include on-site wellness centers where employees have access to on-site health centers with adequate medical professionals: on-site fitness centers with state-of-the-art equipment and education reimbursement where workers are reimbursed $7,500 per year for approved books and courses.
The firm’s compensation is composed of industry-competitive base pay, annual cash bonus, and other long-term incentives. The workers also have ten paid holidays, paid time off, eight weeks paid maternity leave, four weeks paid parental leave, jury duty leave, military service leave, extended sick leave, bereavement leave among other benefits. The employees also have health coverage, retirement benefits n life insurance among other benefits (Anadarko, 2018). The total reward system supports the HR role at the organization by ensuring that the employee turnover rate is low promoting worker retention. The retention of experienced workers promotes operational efficiency. The employee benefits package also attracts competent workers from other firms in the industry thereby promoting the firm's competitive advantage.
Akhtar, C. S., Aamir, A., Khurshid, M. A., Abro, M. M. Q., & Hussain, J. (2015). Total Rewards and Retention: Case Study of Higher Education Institutions in Pakistan. Procedia-Social and Behavioral Sciences, 210, 251-259.
Anadarko, (2018). Benefits and compensation. Retrieved from: https://www.anadarko.com/Careers/Benefits/ on December 10, 2018.
Bussin, M. (2018). Reward Solutions to Retention Questions. In Psychology of Retention (pp. 395-413). Springer, Cham.
Chartered Institute of personnel and development [CIPD], (2010). Employer branding and total reward. Research report. Broadway London.
The Crown Estate, (N.d.). New total reward scheme. Case study. Retrieved from: https://www.innecto.com/images/library/files/the_crown_estate_case_study_-_july_2011.pdf on December 10, 2018.
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