Human Resources Proposal the Total

Human Resources Proposal

The Total Reward Model: A New Paradigm in Employee Motivation in Technical Fields

Research in employee motivation has focused on which methods result in the most effective means to stimulate employee motivation. Until this point, the body of research has focused on the study of single methods and their effectiveness on employee motivation. For instance, research has focused on pay, benefits, job satisfaction, and employee review as a means to motivate employees. This research approach led to the conclusion that different types and methods of employee motivation led to different results, depending on the personality and individual traits of the employee's personality. Now, a new paradigm has entered into the field of employee motivation. This approach is the total rewards approach. This research will explore total rewards in terms of its effectiveness in motivating employees and improving company performance.

Increasing demand for high quality employees has been problematic in technical fields for quite some time. The number of potential candidates for these types of positions has increased. However, competition for skilled employees can be brutal and good candidates can be easily attracted away. In highly technical fields, trained and skilled employees are one of the most valuable assets the company can have.

This is particularly true in areas that involve research and development. Finding ways to attract and retain highly desirable technical employees is one of the key challenges that human resources departments face. This research will explore which elements of the total rewards program would be of most benefit to human resources departments in developing their staff and in keeping their most valuable assets.

Problem Statement

This research will examine the total reward model of employee motivation. It will explore various methods of implementation and will explore the effectiveness of applications of this model. It will examine the problem of whether the total reward model of employee motivation is superior to other methods that have preceded it. This study will concentrate on technically oriented fields in the computer industry, as this is a highly competitive area of the workforce and will continue to be in the future. Retaining high quality technical employees will be a key element of success in technically oriented fields.

Related Research/Literature Review

Success in technical fields depends on the ability to attract, motivate, and retain high quality employees. Human capital is now considered one of the most important factors in the ability to maintain profitability. In order to increase productivity, resulting in a successful of enterprise, the rewards packages offered were often the same. The premise was that if the employee provided something to the company then the company would provide something of value to the employee. The problem was finding the right set of rewards that would be effective in motivating the employee.

In order to understand how the total rewards model developed, it is important to understand the processed used by organizations to design their compensation packages. Prior to the 1970s, salary structures were rigid controlled by management. During this time benefits packages used a homogeneous compensation packages that were presented to what was considered a homogeneous workforce (Worldatwork.org, 2006). This resulted in a workforce where of some were motivated by the package offered, but others that were not, encouraging them to go elsewhere for a company that offered a better package. This was not an effective means to motivate or retain valuable employees.

During the 1970s and 1980s organizations began to realize that benefits and compensation packages were a part of the business strategy that would give them an edge in their ability to attract the best employees and managerial staff. The strategically designed compensation packages were in response to the development and emergence of multinational corporations, competition in the business environment, and a diversified workforce that did not fit into stereotypical household models of the 1950s and 1960s (Worldatwork.org, 2006). These changes were also a result of rapidly rising benefits costs and new government regulations and mandates in regards to employee benefits. The most important effect of these changes is that employee benefits became a part of the overall strategy of the organization, rather than something which was given little thought.

These changes caused professionals to seek more efficient ways to improve employee attraction, retention, and motivation. The results of these changes produce the emergence of human resources specialists who concentrated on developing compensation and benefits packages for the company that would meet their financial goals, as well as their attraction and retention goals for maintaining a high quality workforce. This developed into a new way of thinking about compensation and benefits. The concepts of tangible and intangible benefits began to emerge, as well as flexibility in benefit packages (Worldatwork.org, 2006). The total rewards model developed out of the concept that benefits were a part of the competitive and strategic advantage of the workforce.

The total rewards model concentrates on three primary elements. These are compensation, benefits, and the work experience. The total rewards model includes the need for acknowledgement, balance in work and family life, culture, career development, and the environment of the workplace. The purpose of the total rewards model is to produce an employee who is satisfied and engaged in the work experience. This produces a business the enjoys improved performance and results that are measurable in terms of growth (Worldatwork.org, 2006). The principles of compensation, benefits, work/life balance, performance recognition, and development in career opportunities are the five core areas of concentration in the total rewards model. Leveraging these five areas is the key to a successful total rewards program.

Using the total rewards model the employer provides total rewards that are valued by employees and the employee in turn provides commitment, talent and effort that ensures the success for the company (Worldatwork.org, 2006). Total rewards programs include both monetary and nonmonetary means to motivate employees. Now let us examine the five areas of the total rewards model more closely.

Compensation is the first area of the total rewards system. In order to understand compensation, one must examine the different types of compensation data are currently being used by human resources professionals. Fixed pay of is known as "base pay." This type of pay is compensation that does not vary due to performance or the results of an employee's work. This can vary in different organizations. Variable pay is another type of compensation that changes directly in accordance with the level of performance. This type of pay is a direct result of the employee's work. Often, benefit packages require that the employee must re-earn this one-time pay every work period. Short-term incentive pay focuses on performance over a period of one year or less. Long-term incentive pay is designed to focus on a period of longer than one year and often includes incentives such as stock options, restricted stock, or the performance-based benefits and cash (Worldatwork.org, 2006).

Compensation also includes various benefits such as social insurance, including unemployment, workers' compensation, social security, and occupational disability. Other benefits can include group insurance, and pay for time not worked such as holidays, and vacations. Compensation is often included as part of the pay and benefits program. These are often homogeneous and everyone has a chance at the same benefits structure. However, some companies offer employees various choices based on tenure or level of employment.

The second category of the total rewards program is work/life balance. These include activities that directly support efforts to help employees achieve success at both work and home. The some of these benefits include workplace flexibility, additional paid and unpaid time off, and caring for dependents. Community involvement is another element of the program, as is managerial intervention for cultural change within the organization to create a more positive work environment. Some companies go as far as including day care or benefits for parents who must use child care in order to continue to work. Some of the most innovative programs involve onsite day care that allows mothers to have some form of direct care involved with their children as they progress through the work day.

The third area of the total rewards program is performance and recognition. The backbone of the system is performance planning where the expectations are established that link individuals with team and organizational goals. Performance refers to the actual performance of the skill or organizational goal by the employee. Performance feedback refers how managers communicate the results of performance back to the employee. This can include employee reviews and suggestions as to how the employee can improve their performance in the future. Recognition is the program whereby an employee is recognized for their actions and performance. It reinforces the value of continued improvement and provides positive feedback. It makes them feel as if they are a valuable member of the team.

The fourth area of the total rewards program is development and career opportunities. Employees must be able to the advance and develop a sense of personal goals within the organization. Programs that fall under this category include learning opportunities, coaching and mentorship, and opportunities for advancement. These programs help the employee to use their greatest talents and assets for the improvement of the organization.

The fifth area of the total reward strategy involves culture. Culture refers to the attitudes and behaviors that collectively influence how an individual behaves. Cultural change is difficult because it means of changing attitudes and fundamental beliefs of a society or organization. Culture is an element that can influence the total rewards model. The work environment is another factor of that can influence the effectiveness of the total rewards program. These factors influence the effectiveness of the total rewards model and benefit programs by influencing employee perceptions.

These five areas of the total rewards program are consistent across many companies. These five elements have become common terms in the provision of compensation and benefits packages. They are often unchanged in their order. Total rewards programs often list specific company benefits in these five categories. This program has become one of the most common in many areas. Case studies are the most common type of study that is conducted on the effectiveness of these programs. However, in the development of these programs it is important to understand which benefits will be the most popular with the largest number of employees. It is difficult to please everyone, but human resources departments can learn of much about the types of elements to include in their programs using the survey methodologies. This is the theoretical foundation behind the proposed research study.

Motivation is another element that must be included in a discussion of the total rewards model. Motivation falls into two categories, intrinsic and extrinsic. Intrinsic motivation includes an employee's sense of achievement, and respect for themselves as a person. Intrinsic motivation results in higher levels of performance than extrinsic motivation. Extrinsic motivation refers to motivation that is tangible, such as pay and benefits. This type of motivation was once thought to be the most important, but is now recognized as the least important of the two types of motivation (Giancola, 2007).

The pay and benefits package offered by Constellation Energy (2011) is an excellent example of how the total rewards program can be put to work. The pay and benefits package they offer is divided into the five basic categories defined by the total rewards model. The Georgia State Government (2011) has also implemented the total rewards approach to pay and benefits, directly following the five categories contained in the model. Many companies now see the benefits of the total rewards program and institute it as their primary model for employee benefits and pay.

Much of the academic information concerning the success or failure of total rewards packages of uses a case study strategy. One of the most pivotal studies regarding total rewards compared companies in new and old economies (Zingheim & Schuster, 2000). This was one of the first studies to determine that people work for more than just rewards and pay. The total rewards program was found to be one of the most successful in creating a synergy between the workforce and organizational goals. The authors of this study went on to form one of the first and largest consulting companies specializing in the development of total rewards programs. Their research dominates academic studies on the success of total rewards programs.

Fay & Thompson (2001) were some of the first to explore the contextual determinants of reward system success. This study collected the data using an exploratory research method of what constituted successful and unsuccessful rewards systems. The reward systems explored included modified base pay, short- and long-term incentives, benefits, prerequisites and lifestyle rewards. Success was measured based on seven different factors and ten different conditions. Follow up telephone calls provided the researcher with greater detail in regards to the responses. This study contributed to the development of a means of analysis that can be used to determine the success of the program. It determined that a common set of criteria could be used to judge the success of different programs. This research supports standardization of criteria to measure the success or failure of total rewards programs that will be examined in the proposed research study.

Danish & Usman, (2010) found a distinct connection between the employee commitment and organizational performance. They also found that reward and recognition programs were the most important factors in maintaining employee levels of high self-esteem and passion about their job. Carlson (2005) found that the approximately 64% of workers feel a sense of strong commitment to their organization. This was up from 56% in 2002. Pay and benefits were not the only reasons for these findings. One study found that companies need to extend their focus beyond pay and benefits in order to retain the good employees that they have already have.

Khan, Farooq, & Ullah (2010) investigated the role that rewards play in employee motivation in commercial banks. The study used a total of 200 questionnaires as their data collection instrument. The study found that management can use four different tactics to motivate employees in commercial banks settings. It also found that different tactics and policies would have a different impact on a population of diverse employees. Another study explored the role of intrinsic and extrinsic variables on employee retention and turnover (Samuel & Chipunza, 2009). This study found that training and development, challenging and interesting work, and freedom for innovative thinking were key elements in reducing employee turnover rates.

Current literature focuses on the development of theory regarding how to improve the employee retention and increase employee motivation. The total rewards model is based on the culmination of this research, which began in the late 1990s. Several studies have found that rewards other than pay are the most important in retaining valuable employees. Although studies that support intrinsic rewards as the most important element in retaining employees are plentiful, few studies exist on the effectiveness of total rewards programs. Most of the studies that exist that are case studies and only apply to companies that are similar, or in the same industry as the company that was used as the basis for the study.

The purpose of this study will be to examine which types of reports are the most beneficial for inclusion in a total rewards package. In order to accomplish this task the study will focus on benefits that are commonly placed in the five areas of total rewards programs. The purpose of this study will be to develop best practices in terms of total rewards programs. Total rewards programs were developed from the body of academic research on which employee benefits packages were the most effective and on the effects of various factors on employee motivation and retention. The total rewards program is a result of previous research in this area. This study will contribute to this body of research by expanding this research into the development of a more precise best practices program than currently exists in the it field. It will help human resources departments to develop the most effective benefit packages that will result in the most effective means of to retain employees in technical fields.

Objectives

The objectives of the study are to develop a best practices in the area of total rewards benefits and pay packages. The study will help to determine which of the five elements of the package are most important in retaining key employees. It will also help to determine which of these five of areas are the most effective and most important in the minds of a majority of employees in technical fields. The study will help in the development a benefit packages for technically oriented persons in the computer industry. The research will address the following objectives.

1. To determine which of the five areas of the total rewards model are most important in attaining and retaining technically oriented personnel.

2. To determine which of the most common of elements of these five areas of the total rewards model are the most effective in attaining and retaining technically oriented personnel.

3. To develop a set of best practices that will help human resources personnel develop pay and benefit packages that will help them to achieve their goals of employee retention.

Research Procedure (Methods)

This study will use a quantitative research method that employs a questionnaire. A quantitative study is appropriate for this research design as the data can be easily converted into numerical data. One of the key drawbacks of this type of study is that it doesn't provide a high degree of the insight into the reasons behind the answers. However, the objectives of the study are to aide in the development of total rewards programs that will be most effective in retaining employees. Therefore, the most relevant data will be that which demonstrates the preferences of a majority of employees. This type of information would be indicative of a quantitative study.

Population and Sample

Respondents will be of various demographic profiles. They will have been in the computer industry for varying amounts of time and with the company that they work for various amounts of time as well. The questionnaires will be distributed to twenty employees from each of ten different computer-related companies.

Research Design

The study will involve the distribution of 200 questionnaires to employees in technally oriented companies. All of the companies will be involved in the computer industry. The questionnaire will be divided into five sections that correspond to the five areas of the total rewards model. The study will use five independent variables that correspond to the five areas of the total rewards model. The independent variables will consist of compensation, benefits, work/life balance, performance and recognition, and development and career opportunities. Each of the questions will demonstrate an element of these five different variables. The dependent variable that will be the importance of these elements in retaining employees and in keeping them motivated.

Instrumentation and Data Collection

The research method will utilize a questionnaire that addresses employee preferences for a number of potential items that can be included in a total rewards program. Employees will be asked to rate the importance of each item to their willingness two remain at their current employer, or whether they will be likely to look for other employment of based on the inclusion or exclusion of that particular item.

The study items will be divided into five sections of that include rhe five sections of a total rewards program. The five sections of the questionnaire will be

1. Compensation

2. Benefits

3. Work/life balance

4. Performance and recognition

5. Development and the career opportunities

In each section, certain types of benefits will be included and employees will be asked to rank them using a Likert scale. Items in the compensation section will include various types of fixed pay structures, variable pay structures, and incentive pay programs. Items in the benefits action will include social insurance, medical insurance of various categories, and pay for time not worked such as holidays and vacation time. Items in the work/life balance action will include workplace flexibility, the page and unpaid time off, the ability to care for the dependents on site and offsite, financial support, community involvement, and the cultural conditions within the company. Performance Issues will include performance planning, and performance feedback both in terms of quantity and quality.

The recognition section will include items such as the formalized process of showing employee apreciation, the system and types of feedback that are received at the company, and communication as related to the positive behaviors and activities within the organization. This section will focus on the methods that would be most effective in motivating employees. The final section of the questionnaire will explore development in career opportunities. This section will include items such as tuition assistance, training, self-development tools, on the job learning, leadership training, mentoring programs, internships, apprenticeships, and other opportunities for career development and advancement. It might be noted that these are not the only items to be included, they are only examples of what might be included on the final questionnaire design.

Planned Method of Analysis

Data analysis will use statistical methods including frequency distribution. Likert scales can be treated separately or can be grouped summative scales. Both techniques will be used in the data analysis for this study, as both individual items and groups of items will be important to the conclusions of the study. Individual items will be analyzed for their inclusion in future benefit packages. However, grouped analysis will allow the researcher to compare results between the five categories in the total rewards program. General tendencies will be summarized by the median and mode. The chi-square test will be used to analyze data in terms of whether to accept or reject each item as a valid means of motivating and retaining employees.