Introduction
Nowadays, the process of designing the system of total rewards and performance management has a strategic approach. It is generally recognized that industries have different business environments. Therefore, it is important for the business to understand its environment and adopt changes and improvements. The purpose of the paper is to provide research findings of objectives, goals, and challenges of Lucid Marketing Inc., its current monetary and non-monetary rewards program, and the work environment. According to the research, some changes to the total rewards program will be recommended, including a description of the opportunities of a new program, and the risks of ignoring the recommendations. The metrics for assessing the total rewards program will be provided, as well as the timeline for implementation.
Description of the Organization
Lucid Marketing Inc. is a global company whose goal is to provide innovative marketing solutions for a wide range of products and services. The organization plays the role of an intermediate party for successful cooperation between its various clients and retailers. It works with the biggest retailers in the world, and its objective is to give the clients a unique opportunity to reach the people who are usually difficult to contact. Its core competence required for success is to offer a diversity of marketing strategies for high-level organizations, guiding them through branding, public relations, media, and marketing communications.
The company has been able to maintain its leading positions in the market for more than a decade. It was capable of attracting diverse talents to achieve prosperity and success. Still, the management has to assure the security of the company’s future. The values of the company include attempts to guarantee steady development and growth of the organization. Lucid Marketing Inc. is searching for specialists with specific traits, such as intellectual, interpersonal, leadership, and organizational skills.
The current challenges of the company include the imperfect rewards tied to the goals which might not be mastered by the employees yet. Thus, the employees feel that the rewards should be calculated according to the produced work and current projects. Another challenge is that its current employees are aging and will be retired soon. Therefore, the company requires some new rewards to attract new workers from the next generation. There is a plan to invest in full-time positions abroad to attract diverse talents. The organization also needs some transparency in work-sharing and production.
Total Rewards Model of the Organization
It is a general opinion that benefits are “an important component of the employment relationship, providing employees with financial protection, access to health care and programs to support work/life balance” (Kwon, & Hein, 2013, p. 32). A well-developed total rewards program attracts new talents to the company helping it to achieve better results and keeps the employees loyal to the selected organization in the course of their careers. The investment in benefits and rewards programs may help the company to reach higher revenue in the future due to the significant amount of talented workers satisfied with their job.
The notion of total rewards usually includes all the benefits the employee receives from the organization, including monetary and non-monetary rewards. Some researchers emphasize that “the concept of total reward has emerged quite recently and is exerting considerable influence on reward management” (Armstrong, & Taylor, 2014, p. 629). Thus, a total reward program combines the influence of two main categories of rewards such as transactional and relational ones.
Lucid Marketing Inc. is oriented to attraction and maintaining a talented workforce to reach a high level of services for its global clients. Its offerings are categorized by the retirement benefits, monetary and non-monetary rewards. The current total rewards model of the organization includes a competitive salary for the existing positions, matching to 401(k) plan up to 90 percent, tuition assistance, paid vacations, and health-wellness programs. Tuition assistance offers pre-paid classes for grades higher than C. Health-wellness programs consist of gym membership discounts and in-house free gym for selected work locations.
The approach to total rewards cannot be based on the isolated mechanisms of rewarding and should take into consideration the everyday performance of the organization. The concept of total rewards includes using various configurations of rewards that are integrated with the business strategies of the company. The benefits of a successful total reward program are in a greater impact on the motivation of the employees, flexibility in meeting the individual requirements, and effective talent management.
Segmentation of the Workforce and Competences of the Workers
Workforce segmentation includes identifying unique groups of employees and applying different management practices to them according to their characteristics and needs. It is possible to segment the workforce by generation, nationality, and performance. The current workforce of Lucid Marketing Inc. consists of a large number of talented Baby Boomers born in the United States.
The company is planning to attract new talents and employees located in other countries. It is emphasized that different groups of workforce vary in their preferences in work schedules, attitudes to work, and career. Some studies suggest that “there are individual differences in the link between job rewards and job satisfaction in that for some people extrinsic rewards do indeed relate to satisfaction, whereas for other people this is not the case” (Hofmans, De Gieter, & Pepermans, 2013, p. 2). It is significant to keep in mind the importance of retaining talents. According to some researchers, “because of demographic changes, the demand for talent will increase, while supply will decline” (Govaerts, Kyndt, Dochy, & Baert, 2013, p. 36). It is crucial to develop a distinct company strategy to meet the requirements of all the groups, retain talents, and avoid a turnover.
Lucid Marketing Inc. had always been successful in attracting talented employees, which helped it to gain a competitive advantage in the market. To assure future achievements, it offers the employees extensive training and development based on their knowledge and expertise. It is noted that “to develop the desired knowledge, skills and abilities of the employees, to perform well on the job, requires effective training programs that may influence employee motivation and commitment” (Elnaga, & Imran, 2013, p. 137). Therefore, investing in training employees helps to guarantee high performance and influences customer satisfaction.
The company recognizes the importance of maintaining interpersonal communication with internal and external customers. It is interested in developing strong leaders, stating that leadership skills are necessary for achieving success in unique international projects. Its employees are encouraged to develop the skills of self-management because their tasks might change every hour and require certain flexibility to operate them easily.
Attracting new employees to the company might influence its policy and change current requirements. The Millennials may require more non-monetary rewards, as well as more flexible schedules and some days off. It is stated that “financial reward satisfaction relates to job satisfaction for only a subset of employees, whereas the relationship between psychological reward satisfaction and job satisfaction holds for every employee” (Hofmans, De Gieter, & Pepermans, 2013, p. 2). The company will have to make some changes to its total rewards program to retain talents and keep the employees happy and satisfied.
Recommended Changes to the Total Rewards Program
To achieve better results in implementing the total rewards program, the company should define clear goals for the rewards strategy, as well as to adjust it to current business objectives and employees’ needs. It is also crucial to define the success of the organization using such measures as the engagement and satisfaction of the employees. It is obtained through the balance of worker value and gained revenue caused by the investment. Taking into account the preferences of the employees and the impact of various rewards is useful for making the right decision on the content of the total rewards program. It is stated that the “total rewards strategy provides a framework within which employers can design, administer, and evaluate effective total rewards programs” (Kwon, & Hein, 2013, p. 34).
The recommended changes to the total rewards program of the company include the implementation of diverse non-financial rewards. It is a general opinion that the development of non-monetary rewards might be beneficial for the company. Some studies state that “monetary rewards are formal in nature and motivate employees up to the level of showing the desired performance” (Ruksana, & Hein, 2017, p. 20). They are believed to solve the problems at the workplace, providing the employees with the benefits essential for their comfort and health. It is also stated that “some of the non-financial rewards for example praise and recognition are acknowledged as encouraging tools for increasing employees job performance” (Haider, Aamir, Hamid, & Hashim, 2015, p. 342). Some non-monetary rewards for Lucid Marketing Inc. might include lunch order possibility or personalized gourmet meals and such services as spa and massage provided at the location.
It is advisable to take into account employees’ requests and use the monetary rewards which are based on the current work and completed projects. Some researchers highlight the fact that “the challenge for many organizations today is, therefore, to come up with an efficient reward strategy for retaining these core employees for the success of the organization” (Terera, & Ngirande, 2014, p. 482). It is believed to be important to offer the employees a competitive salary and some financial rewards to improve their motivation and retain them in the company.
If the company does not implement the new total rewards program, there will be significant risks of turnover and loss of revenue due to the low motivation of the employees. It is crucial to discuss the new total rewards program with the employees. In modern society, the constant changes in employees’ demands may be rather challenging for the companies. Using some questionnaires is advisable to understand the demands of the employees.
Metrics for the Total Rewards Program
Metrics are considered to be a measurement tool that is used to evaluate the performance of the company and the effectiveness of the projects according to the company’s goals. It is generally recognized that metrics should be accurate, credible, and unambiguous. Providing appropriate metrics for the total rewards program of the company may have a great impact on its implementation.
There are three metrics that should be used to evaluate the success of the new total rewards program in Lucid Marketing Inc. Primarily, it is employee satisfaction because the workforce is the core of any business. It is acknowledged that “employees are the most valuable asset of every company as they can make or break a company’s reputation and can adversely affect profitability” (Elnaga, & Imran, 2013, p. 137). Thus, it is important to recognize the value of the employees and ascertain that their voices are heard. The employees should be encouraged to share their challenges and satisfaction level. It is suggested to use a quarterly web survey to secure the opportunity for written feedback. The collected information will be processed to detect the suggestions that can be implemented.
Secondarily, the turnover reduction should be chosen as a metric. Turnover is stated to be one of the most expensive aspects of the process of searching and retaining talents. It is generally recognized that “if an organization is not able to retain its employees, it will not be able to capitalize on human assets developed within the organization” (Terera, & Ngirande, 2014, p. 481). Moreover, it will be a significant loss of time and effort if the new employee leaves the company after working there for less than a year. The process of recruiting and retaining new talents should be managed thoroughly. It is crucial to make the new employee feel comfortable and provide competent supervision to reach maximum performance. It is advisable to appoint mentors for the new employees to guide them through the first month of work and give them the opportunity to ask questions at the monthly appointments during the first year of their career in the company.
The third metric chosen for the company is the increase in production. The output of the company is believed to influence its revenue which is the key to market competitiveness. To assure the motivation of the employees, it is recommended to use monetary and non-monetary rewards for achieving business objectives. Some studies state that “non-financial rewards have their merits in creating an extremely gratified workforce come in the form of job autonomy, participate in decision making, recognition, job involvement, and job significance” (Haider et al., 2015, p. 2). The employees should be ranked and given incentive bonuses for successful projects on a weekly, monthly, and yearly basis. For example, the workers may be presented with small prizes such as mugs and totes or movie and concert tickets. The prizes should vary depending on the significance of the finished work. The annual prizes might include paid vacations or shopping certificates.
The reviewed metrics were selected to attain the satisfaction and happiness of the employees. They assure that the employees of the company will follow the corporate goals, as well as feel their responsibility for the company’s success and development. The given metrics are more likely to help to secure the high performance of the workers.
Timeline for Implementation
The timeline for implementation of the new total rewards program includes four stages of gradual implementation for the new strategy, starting from the assessment of the employees’ needs, which is followed by the evaluation of the collected information, selection of the proper monetary and non-monetary rewards and their implementation. The new total rewards program is expected to be implemented in a year.
Conclusion
The research dealt with the findings of objectives, goals, and challenges of Lucid Marketing Inc., its current total rewards program, and the work environment. During the research, some changes to the total rewards program were recommended, as well as the opportunities of the new program were described, evaluating the risks of ignoring the recommendations. The metrics for the total rewards program were provided, as well as the timeline for implementation.
References
Armstrong, M., & Taylor, S. (2014). Armstrong’s handbook of human resource management practice. Philadelphia, PA: Kogan Page Publishers.
Elnaga, A., & Imran, A. (2013). The effect of training on employee performance. European Journal of Business and Management, 5(4), 137-147.
Govaerts, N., Kyndt, E., Dochy, F., & Baert, H. (2013). Influence of learning and working climate on the retention of talented employees. Journal of Workplace Learning, 23(1), 35-55.
Haider, M., Aamir, A., Hamid, A. A., & Hashim, M. (2015). A literature analysis on the importance of non-financial rewards for employees’ job satisfaction. Abasyn Journal of Social Sciences, 8(2), 341-354.
Hofmans, J., De Gieter, S., & Pepermans, R. (2013). Individual differences in the relationship between satisfaction with job rewards and job satisfaction. Journal of vocational behavior, 82(1), 1-9.
Kwon, J., & Hein, P. (2013). Employee benefits in a total rewards framework. Benefits Quarterly, 29(1), 32-38.
Ruksana, S., & Ahmed, B. (2017). Non-monetary incentives and employee motivation: An empirical study. International Journal of Research in Management & Social Science, 5(2), 20-22.
Terera, S. R., & Ngirande, H. (2014). The impact of rewards on job satisfaction and employee retention. Mediterranean Journal of Social Sciences, 5(1), 481.