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Rewards Can Make a Difference!

Rewards Can Make a Difference!. “High performing organizations with HR programs that are integrated and aligned with key business objectives provide a 3-year total shareholder return of 29.8% vs. 10.3% for all other companies!”*. * Watson Wyatt study of High Performing Companies.

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Rewards Can Make a Difference!

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  1. Rewards Can Make a Difference! “High performing organizations with HR programs that are integrated and aligned with key business objectives provide a 3-year total shareholder return of 29.8% vs. 10.3% for all other companies!”* * Watson Wyatt study of High Performing Companies. 4 key HR programs identified as: • Communicating mission and values that build employee commitment and understanding. • Hiring and developing key talent and capabilities. • Building performance management systems that link employee behaviors to long-term business success. • Providing motivatingtotal reward programs that deliver high value to employees.

  2. TOTAL REWARDS COMPONENTS Non-Cash Recognition Awards Cash Awards Base Salary Work Environment Long-Term Incentives Short-Term Incentives Employee Benefits Learning and Development Sales Incentives

  3. Fundamental Pay Philosophies Pay the Job / Cost of Labor Pay the Person / Cost of Doing Business What’s the difference to the company and employee?

  4. Person Pay Philosophies • Pay for Results • Pay for Behaviors • Pay for Knowledge • Others ? Which is Best ?

  5. Descriptions Skill-Based Pay – Generally applies to lower level jobs with defined skills that are tangible and measurable. Pay for Knowledge – Refers to more whole bodies of study or disciplines. Pay for Competencies – Attributes that are more associated with overall company success than specific skills.

  6. Skill-Based Pay Example IndustryRobotics Machine Tool Company JobsMachinists ObjectiveUnion Avoidance

  7. Design Phases • Establish Design Team and Steering Committee • Determine covered jobs • Identify skill blocks • Weight skill blocks based on complexity and importance • Group skill blocks into levels • Assign pay rates or ranges to levels. • Provide training opportunities to obtain new skill block

  8. Skill Block Mean Rating Skill Pay Level Market Value Master Machinist Sets up all automated machine production runs. 4.71 $18.25 - $23.75 $21.37 Certified in use of 6 or more machine tools. 4.32 Troubleshoots and repairs machine tool problems. 4.15 Recommends procedural changes in production. 4.03 Develops production schedules. 3.98 Journey Machinist Runs full machine productions on existing setups. 3.75 $14.25 - $19.50 $17.98 Certified in use of 3 or more machine tools. 3.65 Maintains and calibrates machine gauges, fluids and readiness. 3.57 Uses precision tools, schematics, and ISO standards to complete work. 3.33 Apprentice Machinist Prepares parts for machine production. 3.15 $10.25 - $15.50 $12.16 Reads work orders. 2.87 Verifies tooling and equipment availability 2.47 Follows Company safety procedures. 2.06 Uses basic hand tools and math concepts. 1.58 Skill-Based Pay Program for Machinists

  9. Alternatives to Skill Based Pay • Market Based Pay • + • Team Incentives for: • Productivity Improvements • Quality Improvements • Safety Improvements • Projects

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