Reward

 

Reward:

This blog will highlight 2 top companies, 1 from the Times Top 100 SME companies to work for in 2013 and the other from the 100 Top large companies. Then we will look at the way in which theses companies reward their employees. This will go on to illustrate by way of compare and contrast the 5 financial and 5 non-financial ways in which they reward their employees.

Reward options:

Table 1

Financial rewards	Non-financial rewards
Salary + bonus based on gain sharing	Personal growth
Salary + profit sharing	Knowledge or professional growth
Employee ownership	Status and public or private recognition
High salary + benefits	Career growth
Salary and bonus on individual or team effort	Job security

Here reward is based on a total approach system, where all reward options are on offer.

Reward as defined in the Business Directory (Business Directory.com, 2013) is a scheme to support and reinforce desirable behaviour.

The two companies looked at today are utilising an all-encompassing approach to reward and combine all of the options viewed in table 1.

The 2 companies are:

Goldman Sachs International, here is a link to the company website for further information (Sachs, 2013) ranked number 9 from the Top 100 large companies and TPP (The Phoenix Partnership) based in Hosforth Leeds, and is ranked number 2 in the 100 best SME company to work for.

Goldman Sachs is a financial services company and has over 5 thousand employees worldwide. This company is a global business entity.

 

Goldman Sachs says; the interest of their clients comes first, not far behind is the need to keep their own employees happy. They go on to say “Our assets are our people, capital and reputation. If any of these ever diminished, the last is the most difficult to restore.”

Non-financial rewards are:

1.    Giving something back; this is in the form of 10% of employees doing charitable work in company time and can be linked to Personal growth and/or status and, public or private recognition.

2.    Job security: Almost half (46%) the Goldman Sachs workforce has been at the company for at least five years.

3.    Gym membership: On-site/subsidised off-site or wellness programme.

4.    Childcare: On-site nursery or free nursery places or vouchers.

5.    Career growth and personal growth: The firm has two internal initiatives for developing staff. Pine Street offers leadership training, while the company’s own Goldman Sachs University has courses taught in the classroom and over the internet to improve business and interpersonal skills.

 

Financial rewards:

 1.    Nearly three-quarters (73%) of people earn £55,001 or more and four out of 10 are paid  more than £100,000 a year.

  

 2.    Pension: Final salary or non-contributory or firms pays double the amount staff contribute.

 3.    Maternity leave: 10 weeks on full pay.

 4.    Dental insurance: available to all employees.

 5.    Shares: All employees are offered share options.

The Phoenix Partnership (TPP) has 170 staff and is based in Hosforth in Leeds, link to their website (TPP-uk.com, 2013). TPP invented a piece of software that enables health care professionals to access a single source of information that records all appointments for patients.

 

The system used enables all 110,000 employees of the NHS in England to access a third of the country’s patient records.

Non-financial rewards:

1.    Giving something back; the firm matches funds raised for charity, with no upper limit.

2.    The working week is 37½ hours, and staff do not feel they are working too much (85%). People can balance work and home responsibilities (87%), thanks to a culture of no long hours

3.     

     Staff are encouraged to avoid overtime, a spokesperson explains: "This means, at 5.15pm when the office is due to close, all staff offer help and assistance to those who have to work later.”

4.    TPP funds regular visits from a masseuse.

5.    Reduced-rate gym membership and fitness classes such as yoga and badminton to help staff to wind down after a difficult day.

Financial rewards:

1.    Shares: All employees are offered share options.

2.    Software developers are paid £28,000 a year, although 92 people earn more than £35,000. Most of the team has a performance-related bonus, and employees believe their pay is fair for the industry (92%), for their responsibilities (91%) and compared with their colleagues (90%). All are top scores.

3.    Childcare: On-site nursery or free nursery places or vouchers.

4.    25+ days leave for all staff.

5.    Maternity pay at 13 weeks of leave on full pay and 13 weeks at 50% of salary.

As defined in the CIPD website, all of the above methods are used to enhance the total rewards  (CIPD, 2013).

Compare and Contrast:

Both companies seen here use a variety of reward methods, but the systems used can be interweaved between companies. The difference in size of these companies means that they have vastly different budgets that are utilised to offer incentives to employees.

Venn diagram illustartes the total reward approach used by both companies.

Nonetheless both companies are in the positions within the Times top Companies for a reason and that is, because they have invested wisely in their employees training, development and incentive schemes.

These two companies are alike in that they look after their employees and yet they are unlike from one another from a budget viewpoint, however, as seen here, there is a theme running throughout this blog, and this is that the employers have a vast amount of talent within their respective organisations, due in part, to the bonus and incentive schemes on offer.

Conclusion:

In conclusion there is a downside to non-financial rewards, and that is, they are non-contributing to the final pension scheme, in fact, some may say, that this is to the detriment of their pension, but this has to be weighed up with the incentives on offer.

The total reward approach enhances motivation and is cost effective in the long term due to staff retention and can be seen to be winning the war for talent.

Works Cited

Business Directory.com. (2013, May 6). Retrieved May 6, 2013, from Business Directory.com: http://www.businessdictionary.com/definition/reward.html

TPP-uk.com. (2013, May 4). Retrieved May 4, 2013, from tpp systemone: http://www.tpp-uk.com/

CIPD. (2013, February). Strategig reward and total reward. Retrieved May 5, 2013, from CIPD 100 years of leading HR into the future: http://www.cipd.co.uk/hr-resources/factsheets/strategic-reward-total-reward.aspx

Sachs, G. (2013, May 6). Who we are. Retrieved May 6, 2013, from Goldman Sachs: http://www.goldmansachs.com/who-we-are/index.html#