Each profession has its own “tools of the trade”, and we in the rewards profession should be mindful of the many tools at our disposal. Yet, so many of them are unused.
In rewards, we have many tools. How many do you use? I have counted 100 specific rewards practices. Read below for some popular practices. Download Whats in Your Rewards Toolkit, for your reference or to share. Read on to see a quick list of common rewards practices.
Base salary, annual fixed bonus, annual performance incentive, sales commission, annual profit sharing, car allowance, signing bonus, project completion bonus, phantom stock/shares, SARs (stock/share appreciation rights), spot awards, discretionary bonus, deferred compensation, etc.
Stock/share options, stock/share grants, restricted stock/shares, performance restricted stock/shares, employee stock/share purchase plan (ESOP), deferred shares.
Benefits–Health & Welfare
Medical insurance, which can be fully-insured, self-insured, partially self-insured with stop-loss coverage; medical can cover an combination of: hospital, urgent care, ambulatory, inpatient surgery, outpatient surgery, maternity, outpatient primary care, outpatient specialist care, chronic illness, mental illness, pharmacy (name brand drugs, generic drugs, mail order prescriptions), dental surgery, preventive care, wellness.
Executive physical exam: health screening for senior executives to ensure they are healthy, and for early detection of serious potential medical issues.
Dental insurance: periodontia (cleanings, fillings), prosthodontia (crowns, bridges), orthodontia (braces)
Vision: refractive eye exam, frames, lenses, contacts; optometrist services. Lasik surgery. Ophthalmology (eye surgery) normally covered under medical.
Long-term care: covers daily nursing home charges.
Life insurance (with or without accelerated death benefit for those terminally ill who want to take a reduced benefit before death).
Personal accident: additional cover for accidental death or dismemberment (loss of finger, etc.)
Disability insurance: replaces income due to inability to perform one’s job (or any job) due to illness or injury.
Flexible benefits–offering a combination of benefits in one plan where an employee has choice within a framework.
Defined Benefit Pension (DB) which provides lifetime income following retirement from company, normally equal to a percentage (e.g. 70%) of final three-year average salary, subject to service and vesting rules.
Defined Contribution Plan/Scheme (DC) in which a company pays a fixed percentage of salary (or to a salary cap) each payroll into a retirement account in the employee’s name. Contributions may be from both employer and employee. Company contribution may be a “match”, i.e. based on the employee contribution.
Savings plan, which can involve an arrangement with a local bank or credit union, whereby the employee authorizes a fixed monthly deduction/transfer of money to a savings account, and the company matches the employee contribution. Unlike a DC plan, assets can be withdrawn prior to retirement age with no penalty, making it ideal for employees wishing to save for a house or car.
There are many forms of retirement plans not mentioned as they are usually designed in relation to 1) government/mandatory social security or provident fund plans/schemes; 2) industry and demographic considerations; and 3) funding/financial considerations.
Benefits–Paid Time Off
Public Holidays, annual leave, sick time, maternity leave, personal leave, compassionate leave (bereavement), civic service leave (military or jury duty), exam leave, and many others.
Paid Time Off (PTO) Bank–an all-in-one annual allowance for paid time off, inclusive of annual leave, sick leave and personal time off. No MC required. If you are sick, just don’t come to work…, but it counts against your total PTO balance, meaning your fake sick leaves will reduce what’s left for the family vacation!
Unlimited Time off–yes, some companies allow unlimited time off. You will be fired if you abuse it!
Flex Time or Flexible Work Hours – allow employees choice of when to come to work, when to leave, as long as they work a full week in terms of hours, and as long as they are at the office during “core hours”, e.g. 10-4. Meetings should be scheduled within core hours.
Work at Home / Telecommuting
Onsite Childcare–so employees don’t arrive late or leave early to drop off/pick up kids. Can see them during lunch too.
These are the ones that come to mind, and there are many others. In almost every country, you will find something unique to that country that you have never heard of. Morning exercises in Japan, afternoon TaiChi in China, cash attendance awards, coverage of parents on medical insurance in (if you’re single), and many others. Loan programmes, parking, travel allowances, rental benefits.
So, what’s in your toolkit?