Total Rewards Training May 21, 2001
Today s objectives Evaluate the content Validate the logic/flow What s Here What s Not Content Logic/Flow Illustrative Exercises Graphics & Pictures Consistent Look & Feel Delta Total Rewards Vision Statement Handouts Toolkit Resources 2
There are four key learning objectives for the Total Rewards training Understand big picture - Total Rewards drilling into the work experience component which is controllable by managers within their environment Understand the potential impact of Total Rewards R3 reinforcement, recognition and rewards can have in driving performance Understand the role of Delta managers in deploying Total Rewards within their business units Understand how to access information, tools and templates for implementation 3
Our Agenda for the Day Will Cover the Following: FOUNDATION - Why Total Rewards is Important OVERVIEW - Total Rewards POTENTIAL IMPACT The ROI on Total Rewards WHY IT WILL WORK - The Science Behind the Approach Implied Contract Maslow Hertzburg ABC s of Performance Management AN INTEGRATED MODEL R3: Reinforcement Recognition Rewards TOOLS YOU CAN USE SUMMARY 4
FOUNDATION Why Total Rewards?
We start with the premise that people need to feel that their skills and contributions are valued The number one reason people leave their jobs is lack of appreciation & praise. -Sales & Marketing Management poll of Fortune 1000 companies 6
Employees are hungry for answers to five fundamental questions WHAT is it you want me to do? WHY is this important? HOW do you want me to do it? WHERE do I stand? WHAT is in it for me? 7
Employees are looking for clarity in their role in management and daily communication 8
People are not motivated to perform when communication is not clear and they anticipate negative consequences The company says service the customer But the last time I put in overtime to resolve a customer issue, I got in trouble Doesn t she understand we have to keep expenses in line? I m going to miss bonus again this quarter since my department is over on hours EXERCISE: Share and compare experiences in conflicting communication Sources: Human Resources Interview 9
Motivation is more than than a warm-fuzzy concept motivation provides a motive for action 10
Why should managers buy into Delta s Total Rewards Program? Reduce conflict Accomplish group goals in less time Promote clearer communication Supervisor Employee Employee Employee Promote positive relationships Supervisor Employee Employee Employee Easy access to support/tools for implementation 11
People need more than a paycheck 12
What is important to employees? What Workers Want From Their Jobs Hersey and Blanchard Good working conditions Feeling in on things Tactful disciplining Full appreciation for work done Management loyalty to workers Good wages Promotion and growth with company Sympathetic understanding of personal problems Job security Interesting work EXERCISE: Put yourself in your employees place and rank in order of importance, the needs listed below. Number 1 will be the highest ranked need, while 10 will be the lowest in importance. REMEMBER: Do not think in terms of what you want but in terms of what you think the employee wants. 13
The surprising results on what is important to employees The actual results from the study What Workers Want From Their Jobs Hersey and Blanchard Good Working Conditions Feeling in on things Tactful disciplining Full appreciation for work done Management loyalty to workers Good Wages Promotion and growth with company Sympathetic understanding of personal problems Job Security Interesting work Supervisors 4 10 7 8 6 1 3 9 2 5 Employees 9 2 10 1 8 5 7 3 4 6 14
Why employees will buy-in to our Total Rewards program Employees needs will be satisfied Appreciation / recognition for work done Feeling in on things Sympathetic understanding (empathy) 15
OVERVIEW Total Rewards
The challenge is to develop and implement a flexible program that capitalizes on a diverse workforce Valuing each employee includes understanding that everyone does not want to work the same way or be rewarded the same way. To achieve excellence, companies need a portfolio of total rewards plans. -Total Rewards Guidebook WorldAtWork 17
Delta uses best practice compensation, competitive benefits and a new emphasis on the work experience Benefits Compensation Work Experience Delta s Total Reward Mission/Vision statement needed 18
Total Rewards is All of the resources available to the employer that may be used to attract, retain, and motivate employees. 19
There are three primary components to Total Rewards in an organization Compensation Benefits Work experience 20
Compensation: Delta s compensation policy Base pay Share pay reviews and standing on a predictable schedule Compare like workgroups at other major carriers, and Engage employees in dialogue regarding compensation decisions Assessment of pay compared to like workgroups FACT: All of Delta s major employee groups have led their peers at other major carriers for most of the last five years. 21
Employees view compensation as a right whereas recognition is key to job satisfaction and unlocking discretionary performance Compensation is a right; recognition is a gift. -Rosabeth Moss Kanter Consultant & Business Columnist 22
Benefits: Two primary types Mandatory Non-mandatory 23
Benefits: Delta s benefits summary Delta s benefits statement/position summary needed 24
Our focus is on the work experience component where managers have the greatest ability to make an impact The work experience is impacted by managers Work Experience Compensation Benefits Compensation and benefits are impacted by employer 25
Work experience: Determines day-to-day job satisfaction Acknowledgment or recognition of effort / performance Balance of work / life Cultural issues Development opportunities Environmental factors 26
POTENTIAL IMPACT The ROI on Total Rewards
The first step in preparing an ROI model evaluates key financial measures HARD BENEFITS SOFT BENEFITS Immediate Automation vs. manual activities Leveraging dollars spent/ consolidating purchasing Increase employee job satisfaction through use of performance feedback, positive reinforcement, recognition and rewards Near Term Reduce fraud/shrinkage Impact bottom line through performance improvement Increase shareholder value Transform Delta s culture Enhance employee relations Impact recruitment & retention 28
Creating a value matrix enables evaluation from a variety of impact points SPEED Capture 1 st mover spot in industry Increase speed/close performance gaps Immediately improve labor relations QUALITY Increase shareholder value Increase reliability First flight out Increase customer satisfaction Increase employee satisfaction COMPLIANCE Customer commitment initiative Security mandated by legislation Safety COST Solid value proposition Immediate cost savings Significant short-term productivity gains 29
Further evaluation based on the organization s strategic objectives puts the ROI into a broader perspective Financial Employee Focus Customer Focus Innovation Reduce administrative costs Leverage internal resources Develop common infrastructure across all business units Improve intercompany communications and relationships Accountability on performance standards Provide realtime performance feedback Align employee behavior with Delta service standards Improve service standards across all business units Proactive in labor relations Workforce engagement Deploy information technology solutions in an environment that encourages innovation 30
WHY IT WILL WORK The Science Behind the Approach
Based on the laws of science linking rewards to performance works All behavior is a function of its consequences you get what you reward. -Dr. Bob Nelson 1001 Ways to Reward Employees 32
There is a whole body of science behind linking rewards and recognition to performance The Implied Contract Maslow s Hierarchy of Needs Herzberg Applied Behavior Analysis 33
An implied contract exists between the company and employees Definition: The psychological contract existing between company and employee underscores the need of the company to first meet the security needs (base salary, benefits, working conditions, etc.) of the employee and then offer workers opportunities for achievement and recognition before the corporate goal of growth and profit will be fully realized. 34
The implied contract is two-fold: first meet security needs then create a climate that rewards success Responsibilities of the company include Drawing a clear connection between company and personal goals Meeting security needs first Creating a climate that fosters achievement and success Reinforcing desirable behaviors Making people feel valued Rewarding results 35