Total Rewards System Proposal Companies Of All Research Paper

Length: 7 pages Sources: 5 Subject: Business - Management Type: Research Paper Paper: #87235523 Related Topics: Payroll, Total Quality Management, Proposal, Environmental Scan
Excerpt from Research Paper :

Total Rewards System Proposal

Companies of all sizes and types today are faced with the need to provide their employees with an optimal blend of pay and benefits to recruit and retain highly qualified employees. To determine the facts, this research-based assignment focuses on the latest available information about creating, organizing, and managing a total rewards program for a service-based for-profit call center organization that employs 20,000 employees in 17 different countries. The company of interest employs 2,000 management-level individuals who speak a variety of languages as well as diverse individuals who are governed by multiple regulatory environments. To this end, this paper reviews the literature to provide a brief overview of the company requirements for a total rewards system and formulates a total rewards strategy that encompasses the fundamentals of compensation and the regulatory environments in which the service-based for-profit company competes. An explanation concerning the advances of the proposed total rewards strategy and how it an satisfy the employees' needs is followed by a determination concerning the key communication components of the total rewards system. Finally, a proposed strategy for devising a competitive pay structure is followed by a summary of the research and important findings concerning a total rewards system in the conclusion.

Review and Discussion

Brief overview of the company requirements for a total rewards system

Although the specific requirements for a total rewards system will vary from enterprise to enterprise, the research to date confirms that a total rewards system can provide companies with a competitive advantage by adopting a holistic view concerning rewards and extending the traditional strong focus on pay and benefits to include other rewards that are available in the workplace, including the provision of a quality work environment and opportunities for learning and development (Rumpel & Medcof, 2009). The potential return on investment in a thoughtful, well designed total rewards system is significant. In this regard, Rumpel and Medcof note that, "Because these rewards are a high priority for workers, total rewards offers an opportunity to tap the unrealized potential of the organization. Effectively managed rewards will ease the critical attraction, retention and motivation challenges faced by firms" (p. 28).

As noted above, properly formulated and administered, total reward systems can provide companies of all sizes and types with a competitive advantage over their counterparts that do not. For instance, according to Fitz-Enz (2009), "A total rewards system can be designed to give the organization a competitive advantage" (p. 276). In a total rewards system, all human resource products and services are focused on the company's employees to facilitate optimal performance (Fitz-Enz, 2009). To achieve optimal results, though, it is essential that all human resource functions integrate their operations in order to support other corporate functions (Fitz-Enz, 2009). In this regard, Fitz-Enz (2009) advises that all human resource functions are integrated in order to provide a synergistic outcome. For instance, Fitz-Enz emphasizes that when this is done properly, "The net result is that the total output is much more than the sum of the parts" (2009, p. 276).

Perhaps one of the most important requirements of a total rewards system is a provision for ongoing training and development. In this regard, De Meuse and Marks (2003) report that, "Without the promise of job security, employees frequently conceptualize other inducements they receive from the organization as part of the organization's total rewards system. Employee training and development is a key facet of this reward system" (p. 99). Including training as part of a total rewards system can help overcome the erosion of the social contract that existed in many countries that guaranteed lifetime employment in return for unswerving employee loyalty and hard work. For instance, De Meuse and Marks (2003) point out that, "Employees expect that if they do not have job security with the new psychological contract, their employer should at least guarantee that it will provide them the training needed to maintain their marketability" (p. 99). In addition, depending on the jurisdiction and social priorities, other rewards can be included in a total rewards system such as time off for births and deaths (De Meuse & Marks, 2003).

Formulation of a total rewards strategy to encompass the fundamentals of compensation...


A macro view of organizational elements (such as business strategy, people, practices, market position, competencies, and technical skills) is taken. The fact base allows the firm to evaluate reward cost-benefits, risks, alternatives, organizational and managerial readiness, and reward gaps as the basis for plan creation.


This stage develops more detailed plans for changing current programs and creating new ones to close the reward gaps identified in Stage I. These plans are oriented toward ensuring the firm's human capital investment yields the greatest return on investment for reward dollars spent. By identifying and closing reward gaps, the firm begins to build a strategic, integrated infrastructure for total rewards. This stage also includes creating plans for change management and establishing a system to monitor the effectiveness of the new reward infrastructure.


This stage involves execution of the plans made in the two previous stages. The duration of the implementation stage depends on size and scope of the reward changes being executed. This stage is likely to involve substantially more time than the previous two, with ongoing effort and focus placed on executing the change management strategy and clear, well-aligned, consistent communication to employees.

Source: Rumpel & Medcof, 2009, p. 29

One approach to the formulation of a total rewards strategy that encompasses the fundamental of compensation is provided by Rumpel and Medcof who describe the various rewards that are available through work and the workplace as set forth in Table 2 below.

Table 2

Financial rewards available through work and the workplace



Direct Financial

Base salary


Cash profit sharing

Stock programs

Employee referral program (cash rewards for successful hires)

Suggestion programs (cash for ideas)

Indirect Financial

Adoption assistance

Commuter reimbursement (pre-tax)

Company cafeteria

Company store

Dependent care

Dependent scholarships

Discount tickets

Educational assistance

Fitness facilities discounts

Health and welfare benefits

Incremental dependent care (travel)

Insurance via payroll deduction

Long-term care insurance

Matching gifts

Relocation program

Retirement plan(s)

Saving Bonds via payroll



Stock purchase program

Student loans

Tuition reimbursement

Source: Rumpel & Medcof, 2009, p. 29

In addition, because the call center company of interest operates in 17 different countries, the regulatory environments in which the total rewards strategy are implemented must be taken into account in order to ensure compliance (Rumpel & Medcof, 2009).

Explanation concerning the advantages of the proposed total rewards strategy and how it might satisfy the employees' needs

The proposed total rewards strategy can provide a number of valuable outcomes, including improved integration and efficiency of the human resource function in support of the company's far-flung 20,000 employees in 17 different countries. For instance, Fitz-Enz (2010) reports that, "The greatest leverage opportunity for HR managers can be found in how their services are delivered. Almost all HR departments deliver in a fragmented manner" (p. 151). In approximately 95% of all organizations, each human resource function, including planning and staffing as well as compensation and benefits and development and relations functions within its own silo (Fitz-Enz, 2010). In these cases, while companies have an overall human resource plan in place, the separate human resource functions develop and provide services according to their own respective time schedules with little or no regard for what their counterparts are doing in other parts of the organization (Fitz-Enz, 2010).

.Determination of the key communication components of the total rewards system

Even the most generous total rewards system will not be as effective if its provisions are not communicated to all employees. It is important to have a standardized approach in place for this purpose. For example, according to Fitz-Enz, "Managers determine what and how we can expect to feel effects on our organization from [external] forces and [internal] factors. From this corporate level scan, linked templates carry the consistent plan down throughout the organization" (p. 277). In any event, the key communication components of the total rewards system must ensure that all stakeholders are made aware of it provisions and how they apply to individual employees and many practitioners recommend using at least three communication modes to ensure this is accomplished (Fitz-Enz, 2010).

Proposed competitive pay structure strategy

A competitive pay structure strategy for the call center company of interest can be formulated by surveying regional enterprises of similar size and purpose and determining a regional average which can be used to develop a competitive pay structure for employees (Rumpel &…

Sources Used in Documents:


De Meuse, K. & Marks, M.L. (2003). Resizing the organization: Managing layoffs, divestitures, and closings: Maximizing gain while minimizing pain. San Francisco: Jossey-Bass.

Fitz-Enz, J. (2010). The new HR analytics: Predicting the economic value of your company's human capital investments. New York: AMACOM.

Fitz-Enz, J. (2009). The ROI of human capital: Measuring the economic value of employee performance. New York: AMACOM.

Graham, M.D. & Roth, T.A. (2008). Effective executive compensation: Creating a total rewards strategy for executives. New York: AMACOM.

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