Remuneration is one of the critical components of any organization’s budget. As such, a properly planned and implemented Total Rewards System remains emphatically important. However, due to the ever-changing and unpredictable nature of the economy and the business environment, organizations face challenges that affect their performance and threaten their existence. This state of affairs has made the once-dominant financial rewards system to lose its importance in the public and private sectors, forcing human resource professionals to innovate different reward strategies. From experimenting with various strategies, it has been established that the right employee reward system capable of generating positive results for any organization is one that incorporates both monetary and non-monetary benefits (Waqas & Saleem, 2014). Accordingly, organizations have moved from trying out the new reward systems to implementing them (Caminal, 2012). It is against that backdrop that this paper proposes a total reward strategy for Skyline BPO Ltd.
The company provides contact center and telemarketing services across 17 different countries in three continents and employs 20,000 staff. Of this workforce, 2000 are middle-level managers who speak various languages. The workforce is made up of individuals who are diverse and are governed by multiple regulatory environments. The organization’s mission is to establish itself as a leader in the contact center and BPO industry by utilizing the global market's talent pool to develop the best labor force in the industry. Its vision is to be a premier provider of contact center and BPO globally.
Delegate your assignment to our experts and they will do the rest.
Overview of the company requirements for a total rewards system
In order to enhance employee performance and pull through stiff competition, an organization needs to have an efficient reward system that aligns its interests with those of the workers. For an organization whose operations are international, the diversity in culture, political and social systems make its workforce to have diverse motivations across the different countries. These diversity challenges make it more intricate for such companies to come with an effective total reward system. To that regard, the proposed total reward system for Skyline seeks to address the following requirements, taking full recognition of the centrality of staff remuneration in the employee-employer relationships.
Foremost, the system needs to reinforce and support the organization's mission, vision, and core values while pursuing consistency with the various cultures within which the business operates. Finding and engaging the right talent can be challenging for any organization, and where the reward programs are weak, employee turnover rates can be significantly high (Bussin & Van Rooy, 2014). Therefore, the system should prioritize the appropriate identification, motivation, development, and retention of talents that are crucial for the organization across the various geographic locations Keller & Meaney, 2017). Besides, it should promote Skyline's ideologies towards the international labor force and promote equity in the various roles and positions within the organization’s structure. On that account, the strategy needs to address the diversity in the workforce and the cultural distinctions while improving the company's performance by being all-inclusive and encompassing the fundamentals of compensation and the regulatory environments.
Furthermore, the reward system should be considerate of Skyline's extensive regional coverage. To that respect, the business needs to have a flexible system that is easy to adapt to (Rafiq et al., 2016). Nonetheless, human resource personnel has to manage any related risks by developing a reward system that is legally defensive in the event that any legal challenges may arise. Additionally, they need to address the rising costs of compensation in relation to long-term and short-term rewards. To achieve this, they need a system that is sustainable, affordable, and cost-effective. As a company that recognizes the need to reward its employees appropriately, Skyline BPO will need a reward system that acknowledges and addresses its workforce's absolute necessities.
A total rewards strategy
This proposal, therefore, adopts a system with three different approaches besides embracing differentiators. The approaches include rewards, access rewards, and contingent rewards.
Rewards: These are benefits that the company is obliged by regulations to offer to its staff, including retirement and welfare benefits. They differ from country to country, depending on the different regulatory environments.
Access rewards: This category includes benefits that a company does not offer directly but instead facilitates access to but are paid for by employees or third parties in some instances. They include discount programs and certain types of insurance covers.
Contingent rewards: These are compensations that are based on employee performance or compliance to certain set standards, including behavior. Such rewards include incentives and personal recognition awards.
The compensations will be both on a fixed and variable basis in the form of financial and non-financial elements. Fixed pay will be based on employee positions and will be competitive as per the nation of operation in line with the company’s ideology of providing competitive remuneration that will enable it to draw top talents in the market. On the other hand, the variable payments will be pegged on employee performance. It will act as a bonus to motivate hard work in employees and inspire competition among them to enhance productivity and performance. This pay system will be structured in such a way that it varies across the various economies in keeping with the needs and expectations of the respective workforce. Below are some of the various key components of the fixed and variable pay that Skyline BPO will incorporate in its total reward system.
a) Financial rewards
These compensations will include all monetary benefits that the staff will get. They include base salary, supplementary salary, short-term and long-term incentive pay schemes, bonuses, and allowances. Base salary is the minimum amount any worker is entitled to excluding all other benefits and is supposed to be guided by the headquarters scale depending on the region of operation (Berger & Berger, 2008). On the other hand, supplementary salary is financial compensation offered to employees for performing extra tasks beyond those assigned according to regular schedules. They include pay for overtime hours. Incentives are benefits offered periodically in appreciation for exemplary performance and could be quarterly, semi-annually, or yearly depending on the country. Similarly, long-term incentives seek to reward employee dedication in the long-run through ownership options such as performance shares, restricted stock, and more depending on the designated nation.
Bonuses, just like incentives, are meant to enhance staff performances but at the group level. They are pegged on collective/team effort and are structured to enhance local employees' coherence and their expatriate counterparts (Berger & Berger, 2008). As for the allowances, these are benefits that are tailored towards basic employee requirements that facilitate their well-being and, consequently, productivity by lowering their cost of living. They include accommodation, education, transport, relocation, where employees have to shift due to work purposes, and pet management. The company will come up with a permissible number between 5 and 8 of benefits under this category, which each worker will select. They will be based on a cafeteria plan whereby the fund budget will be given to the employees so each can spend it on their preferred benefit (Tripathi & Batish, 2019). They could also include hardship allowances one time or regular compensations for jobs done under strenuous circumstances.
b) Non-financial rewards
This category entails all non-monetary compensation to employees. They are employer actions and initiatives aimed at motivating the workers by promoting a participatory and friendly environment that is suitable for career development (Martocchio, 2011). They include cross-cultural training, special skills training, managerial recognition programs, and family-oriented work-life balance programs. Cross-cultural training will enhance cultural awareness creation to facilitate expatriate and employee success in international assignments. Besides, given the cultural diversity in the various countries of operation, such programs will help the staff familiarize themselves with the different norms, values, practices, and languages to enhance employee corporation across all the nations. Likewise, training on special skills required for particular roles will go along way in helping them perform their roles more effectively.
The work-life balance program aims to help the worker attend to their personal responsibilities while still delivering on their professional obligations. Beyond helping them strike a healthy balance between personal and work life, the program also focuses on their family welfare, including children and spouses. It will involve benefits such as facilitating child and elder care, arranging for recreational tours, family health activities, and children's education (Martocchio, 2011). Overall, the company will have to create flexible work schedules that can easily factor in these activities and requirements without interfering with the production process.
c) Benefits
Skyline BPO will provide welfare and health benefits that include health insurance, disability plans, life insurance, and retirement benefits. According to WHO (2019), countries that are more developed have more comprehensive universal healthcare, unlike their developing counterparts. Given the various countries in which the company operates are both in the developed and developing world, the need for health insurance among employees will vary depending on the nation. Regarding retirement benefits, the employer and employee will each contribute a fraction of the required amount. In addition to these, the organization will offer income protection by paying for time not worked besides offering bereavement, parental, vacation, sick, and absence leaves.
d) Career development
Every individual aspires to further their career within an organization even though these career development goals may differ from person to person (Greene, 2014). It is upon the various organizations to provide skills that will help their staff grow and advance their careers. Other than instituting an efficient promotion and transfer program, the company will organize regular workshops where employees will equip employees to keep abreast of emerging trends and technologies in the industry. The company will also sponsor employees to self-development and leadership training programs and reimburse tuition charges incurred by those who pursue career development on their own.
The advantages of the total rewards strategy you are proposing
The proposed strategy will have various benefits to the organization that will enable it to achieve its goals with ease. The befits are diverse and cost-saving to the company, as discussed below.
a) Improved recruitment
The total rewards system offers several benefits and inducements that will market the company to a job seeker. It will help the organization fill up positions with ease and, in turn, reduce the cost per hire. Besides, it will attract a large pool of talent and enable the organization to get the industry's best talent.
b) High retention rate
As noted earlier, weak reward programs lead to high employee turnover. Staff resignations or attritions cost the company in terms of loss of skills and finances of hiring and training new workers Kwame et al., 2017). On the contrary, a reward system that compensates employees appropriately will ensure employee satisfaction and boost employee retention. This way, the business retains the best talents besides motivating them to offer their best. Moreover, retention saves the business finances that would have been used in the recruitment and training of new staff.
c) Engaged employees
By providing an enabling environment, equitable compensation, career development, and personal growth opportunities, the total reward system motivates the workers to be more productive and enhance performance. They felt appreciated and therefore develop greater commitment and engagement to the company. Eventually, they will promote the organization's image as a great working environment and spread positive attributes about it, thereby improving its steaks in the industry.
How it satisfies the employees’ needs
Other than the direct benefits outlined, the strategy will offer the employees satisfaction in different ways. First, an effective total reward plan contributes to building an active and well-respected brand. As Wilden et al. (2010) observed, employees like being associated with reputable and progressive organizations. Furthermore, it earns them a sense of better job satisfaction. Second, the strategy points to a clear set of goals where employees know what is expected of them and what they should expect in return for their services. Thus, they can easily perform their duties and know what values to expect from specific rewards. This set of benefits will enhance workforce morale and improve individual performance. Finally, the total rewards system will provide the workers with welfare benefits and opportunities to further their careers and improve their livelihoods and quality of life.
Key communication components of the total rewards system
In order to promote fairness in helping employees claim the benefits they are entitled to, the organization will communicate its rewards system in a way that ensures all employees are informed. Considering the diversity of Skyline's workforce, one size communication will not be suitable. Also, Shakeel and But (2015) state that a system that delivers information through multiple channels can reach more employees and, consequently, create value successfully. In that respect, multiple communication channels will be employed. Newly recruited and nearly retiring staff will be provided with checklists. At the same time, the human resource team will constantly disseminate information to the employees on the rewards via emails, electronic blogs, individual compensation statements, and print outs such as newsletters and leaflets.
Strategy for devising a competitive pay structure
Skyline BPO appreciates the necessity for a competitive pay structure, which is in line with its vision of becoming the market leader. In that regard, it will conduct thorough market research to establish the average pay in the labor market across the various nations with a view to providing a better reward system than its competitors. Given the ever-changing global economic environment, the pay package should be reviewed on a regular basis, most preferably annually, while keeping it competitive in formulating an irresistible pay structure. The company envisions a highly productive workforce and believes that attractive pay packages will be important in attracting high performers. The firm is willing to pay for the best talents in the market that will help it achieve success.
Conclusion
In order to meet its mission and vision, the company requires a total reward system that will target, nurture, and retain a skilled and talented workforce. In formulating a system that is well designed, communicated, and delivered, this paper seeks to achieve that by providing an incentive that will attract and keep the right people into the organization. With the inclusion of various rewards, including benefits and direct compensation in monetary and non-monetary forms, the program will successfully address employees' needs and enhance their performance and satisfaction. Most importantly, the company should focus on lowering the cost of living for the employees as well as keeping the reward costs sustainable and cost effective.
References
Bussin, M., & Van Rooy, D. J. (2014). Total rewards strategy for a multi-generational workforce in a financial institution. SA Journal of Human Resource Management , 14 (1). https://www.researchgate.net/publication/281021918_Total_rewards_strategy_for_a_multi-generational_workforce_in_a_financial_institution
Caminal, R. (2012). The design and efficiency of loyalty rewards. Journal of Economics & Management Strategy , 21 (2), 339-371. https://doi.org/10.1111/j.1530-9134.2012.00334.x
Shakeel, N., & But, S. (2015). Factors Influencing Employee Retention: An Integrated Perspective. Journal of Resources Development and Management , 6 . https://core.ac.uk/download/pdf/234696049.pdf
Tripathi, M., & Batish, A. (2019). Letter to the editor. Cafeteria approach to the management of trigeminal neuralgia: Stereotactic radiosurgery as a preferred option. Journal of Neurosurgery , 130 (3), 1029. https://thejns.org/view/journals/j-neurosurg/130/3/article-p1029.xml
Waqas, Z., & Saleem, S. (2014). The Effect of Monetary and Non-Monetary Rewards on Employee Engagement and Firm Performance. European Journal of Business and Management , 6 (31). https://core.ac.uk/download/pdf/234625916.pdf
WHO. (, 2019). Universal health coverage (UHC) . WHO | World Health Organization. https://www.who.int/news-room/fact-sheets/detail/universal-health-coverage-(uhc)
Wilden, R., Gudergan, S., & Lings, I. (2010). Employer branding: Strategic implications for staff recruitment. Journal of Marketing Management , 26 (1-2), 56-73. https://www.researchgate.net/publication/247494812_Employer_branding_Strategic_implications_for_staff_recruitment_Journal_of_Marketing_Management_261-2_56-73
Keller, S., & Meaney, M. (2017). Attracting and retaining the right talent. McKinsey Global Institute study . https://www.paisboa.org/assets/aggie-blog/2019/02.22.19/Attracting-and-retaining-the-right-talent-Nov-2017.pdf
Rafiq, N., Sarwar, A., & Haider Naqvi, S. M. I. (2016). The best fit perspective in reward structure: case studies from Pakistan with theosophical analysis. Science International , 28 (2). https://www.researchgate.net/profile/ambreen_sarwar4/publication/335883812_the_best_fit_perspective_in_reward_structure_case_studies_from_pakistan_with_theosophical_analysis/links/5d8211faa6fdcc8fd6f16c1e/the-best-fit-perspective-in-reward-structure-case-studies-from-pakistan-with-theosophical-analysis.pdf
Berger, L. A., & Berger, D. R. (2008). The Compensation Handbook 5th ed . McGraw Hill. http://dln.jaipuria.ac.in:8080/jspui/bitstream/123456789/5565/1/The%20Compensation%20Handbook.%20A%20State-of-the-Art%20Guide%20to%20Compensation%20Strategy%20and%20Design.pdf
Martocchio, J. J. (2011). Strategic compensation: A human resource management approach . Pearson Education, India. https://www.researchgate.net/profile/Alex_Lascarides/publication/220794505_Strategic_Conversation/links/53fd8bdd0cf22f21c2f80634.pdf
Kwame, K., Mahama, F., Boahen, P. N., & Denu, M. K. W. (2017). The Effect of Employee Turnover on the Performance of Zoomlion Ghana Limited. Journal of Business and Economic Development , 2 (2), 116-122. http://article.sciencepublishinggroup.com/html/10.11648.j.jbed.20170202.17.html#:~:text=Employee%20turnover%20affects%20both%20workers,hiring%20and%20training%20new%20workers .
