Module 4 Backgroundtotal Rewards In Practicein Module 4 We Will Be ✓ Solved

Module 4 - Background TOTAL REWARDS IN PRACTICE In Module 4, we will be looking at the importance of determining compensation program effectiveness. There are basically two commonly used approaches to evaluate the effectiveness of HRM’s total rewards practices: the audit approach and the analytic approach. The Audit Approach The audit approach focuses on reviewing the outcomes of the human resource compensation function. Key indicators and customer satisfaction measures are typically collected. Electronic employee databases and information systems have made it much easier to collect, store, and analyze key indicators than in the past, when information was kept in paper files.

Some examples of key pay-related indicators include: · Per capita (average) merit increases · Ratio of recommendations for reclassification to number of employees · Percentage of overtime hours to straight time · Ratio of average salary offers to average salary in community · Fairness of existing job evaluation system in assigning grades and salaries · Competitiveness in local labor market · Relationship between pay and performance · Employee satisfaction with pay Some examples of key benefits-related indicators include: · Average unemployment compensation payment (UCP) · Average workers’ compensation payment (WCP) · Benefit cost per payroll dollar · Percentage of sick leave to total pay · Promptness in handling claims · Fairness and consistency in the application of benefit policies · Communication of benefits to employees · Assistance provided to line managers in reducing potential for unnecessary claims Many firms have gone to surveys of top-level line executives as a means of assessing HRM effectiveness.

For example, relating this to total rewards, the top-level line executives can see how the total rewards system and practices are impacting both employees and the overall effectiveness of the firm from a strategic standpoint. They can also help determine how well HR employees’ perceptions of total reward program effectiveness align with the views of their line colleagues. The Analytic Approach In this approach, focus is placed on either: a. Determining whether the introduction of a total rewards program or practice (like a new benefit) has the intended effect. Usually evaluators are most interested in determining the degree of change associated with the program or practice. b.

Estimating the financial costs and benefits resulting from a new compensation practice. In this approach, concern is placed on the dollar value (costs vs. benefits) of the new total rewards program or practice. For example, determining the effectiveness and cost-effectiveness of a wellness program might include: · Annual direct program costs, per employee per year · Percentage of cardiovascular disease risks (high blood pressure, overweight, smoking, lack of exercise) reduced or relapse prevented · Amount spent per 1% of risks reduced or relapse prevented Once the total reward program or practice has been evaluated, HRM can explore how to improve its effectiveness in contributing to the competitiveness of the organization.

There are several different ways HR professionals might attempt to improve the effectiveness of a total rewards program/practice: · Restructuring: For the total rewards/HRM function to contribute strategically to the firm’s effectiveness, the senior HR person must be part of the top management team. · Outsourcing: This entails contracting with an outside vendor to provide a total rewards product or service to the firm, instead of producing the product/service using employees within the firm. · Process Redesign/Reengineering: Completely reviewing critical work processes to make them more efficient and able to deliver higher quality total reward services. This may also include implementing new technologies (e.g., HRM information systems).

Sources: Erfurt, J., Foote, A., & Heirich, M. (1992). The cost-effectiveness of worksite wellness programs. Personnel Psychology, (45) 22. Noe, R., Hollenbeck, J., Gerhart, B., & Wright, P. (2006). Human Resource Management.

New York, NY: McGraw-Hill Irwin. Tsui, A., & Gomez-Mejia. (1988). Human Resource Effectiveness . Washington, DC: The Bureau of National Affairs. Required Material Aldana, S. (2018).

Wellness ROI vs. VOI: The best employee wellbeing programs use both. Retrieved from Heathfield, S. (2016). Are you getting the best benefit from your employee benefits? Retrieved from Helios HR. (n.d.), What makes up a great total employee rewards package?

Retrieved from Hipple, S., & Stewart, J. (1996). Earnings and benefits of contingent and noncontingent workers. Monthly Labor Review, ), 22-30. Retrieved from the Trident Online Library. Lawrence, T. (2012).

Integrating contingent workers. Baseline, (114), 13. Retrieved from the Trident Online Library. Pedulla, D. S. (2013).

The hidden costs of contingency: Employers’ use of contingent workers and standard employees’ outcomes. Social Forces , 92 (2), . Retrieved from the Trident Online Library. The Kaiser Family Foundation (2018). Employer Health Benefits 2018 Annual Survey: Section 1: Cost of Health Insurance, pgs.

31-42. Retrieved from Optional Material Armstrong, M., Brown, D., & Reilly, P. (2011). Increasing the effectiveness of reward management: An evidence-based approach. Employee Relations, 33 (2), . Retrieved from the Trident Online Library.

OWLPurdue. (2012, May 9). Purdue Owl: APA formatting: The basics [Video file]. Retrieved from Society for Human Resource Management. (2017). Visit the SHRM website ( ) for some of the latest information on dynamic HRM topics, certification details, and SHRM membership information Module 4 - SLP TOTAL REWARDS IN PRACTICE Address the following questions in a question-and-answer format; that is, state the question and then answer it in detail. The Background readings for this module explore the premise of how contingent workers, who have become a key foundation of the U.S. workforce, are compensated.

In this assignment, compare and contrast the various aspects of how contingent workers are compensated compared with conventional workers. As you undertake this comparative analysis, address the following: · How does the employment of contingent employees affect an organization’s business, its HRM responsibilities, its overall costs, and its organizational culture? · In your educated opinion, should the compensation of contingent workers be the same (on a pro-rated basis) as conventional, full-time employees doing the same work? Discuss, bringing in both the strengths and challenges this approach presents. · How would you, as the CEO of the company, create a sense of engagement with the infusion of contingent workers in a workplace that historically consisted of conventional, full-time employees? Use at least 2 library sources and/or background readings to help strengthen and support your 3-page response.

Paper for above instructions

Question 1: How does the employment of contingent employees affect an organization’s business, its HRM responsibilities, its overall costs, and its organizational culture?

The employment of contingent workers—those who work on a temporary or contract basis—has several significant implications for organizations. Firstly, it can enhance flexibility and responsiveness in business operations. By hiring contingent workers, organizations can scale their workforce up or down based on demand fluctuations, thus managing labor costs effectively. This strategic approach allows firms to maintain an agile operation without committing to the long-term financial implications of hiring permanent staff (Lawrence, 2012).
From a Human Resource Management (HRM) perspective, the employment of contingent workers introduces several responsibilities. HR departments need to foster a cohesive culture while managing a diverse workforce, including traditional full-time employees and contingent workers. Employers must ensure compliance with labor laws and monitor contingent workers' safety and accessibility to benefits, which diverges from the more standardized management of conventional workers (Hipple & Stewart, 1996).
In terms of costs, contingent workers can appear financially advantageous as they do not typically receive the same comprehensive benefits packages, such as paid leave or health insurance (Heathfield, 2016). However, relying on contingent labor can incur hidden costs—such as higher training expenses, potential lower employee morale among full-time employees, and sometimes increased turnover rates as contingent workers may not feel as integrated into the organization (Pedulla, 2013). The cultural ramifications are also considerable; an influx of contingent workers can dilute the established norms and values of an organization. This could lead to poor integration between parts of the workforce, promoting a fragmented culture that undermines collaborative efforts (Tsui & Gomez-Mejia, 1988).

Question 2: Should the compensation of contingent workers be the same (on a pro-rated basis) as conventional, full-time employees doing the same work?

The compensation of contingent workers has been a topic of significant discussion. In theory, contingent workers should receive the same pay, proportionate to the responsibilities they fulfill. Offering equitable compensation aligns with principles of fairness and can enhance job satisfaction across the organization (Erfurt, Foote & Heirich, 1992). Having equivalent pay models could bolster engagement and loyalty, especially among contingent workers who contribute substantially to the firm’s success.
However, there are challenges inherent in applying this practice. One prominent challenge is the financial burden that equal pay could impose on organizations, especially smaller companies that heavily depend on contingent labor to keep costs manageable. Additionally, contingent workers are usually viewed as having a more flexible role; hence, from an industry-wide perspective, the transitioning of casual labor into a more permanent compensation structure could prompt a reevaluation of business models (Aldana, 2018).
Moreover, organizations may face resentment from their full-time employees if they perceive that contingent workers are earning comparable pay without the same commitments or benefits that they receive (Armstrong, Brown, & Reilly, 2011). The complexities surrounding the employment status, the nature of the work performed, and the expectations attached to each role must be adequately navigated to establish a balance that maintains morale and financial efficiency.

Question 3: How would you, as the CEO of the company, create a sense of engagement with the infusion of contingent workers in a workplace that historically consisted of conventional, full-time employees?

As the CEO, fostering a sense of engagement among contingent workers requires intentional strategies aimed at building an inclusive and empowering culture. One essential step is to implement structured onboarding programs that familiarize contingent workers with the organization's mission, goals, and cultural values. Educating all workers about how their specific roles contribute to the broader organizational mission fosters a sense of belonging (Noe et al., 2006).
Moreover, creating opportunities for both contingent and conventional workers to collaborate on projects can help bridge potential divides. Encouraging teamwork can cultivate an environment that values every individual's contribution while breaking down barriers between different employment classifications (Armstrong, Brown, & Reilly, 2011).
Equally, I would advocate for transparent communication regarding the expectations and value of contingent workers within the organization. By establishing a clear avenue for dialogue, employers can solicit input from contingent employees on processes, practices, and policies, promoting an engagement model that is responsive to their needs (Aldana, 2018).
Lastly, establishing recognition programs that include contingent workers can reinforce their value within the organization. Recognizing achievements and creating a platform where all workers can share their successes can elevate morale and create a culture of mutual respect and inclusivity.
In conclusion, while the integration of contingent workers into established workforces poses distinctive challenges, it also presents rich opportunities for enriching organizational culture and advocating for shared commitments to success. The onus falls on leadership to stabilize this integration through equitable practices that can embrace diversity in employment statuses while maximizing overall effectiveness.

References

1. Aldana, S. G. (2018). Wellness ROI vs. VOI: The best employee wellbeing programs use both. Retrieved from [Healthfield](https://www.thebalancecareers.com)
2. Armstrong, M., Brown, D., & Reilly, P. (2011). Increasing the effectiveness of reward management: An evidence-based approach. Employee Relations, 33(2), 143-154.
3. Erfurt, J., Foote, A., & Heirich, M. (1992). The cost-effectiveness of worksite wellness programs. Personnel Psychology, 45(1), 17-38.
4. Heathfield, S. M. (2016). Are you getting the best benefit from your employee benefits? Retrieved from [The Balance Careers](https://www.thebalancecareers.com)
5. Hipple, S. F., & Stewart, J. (1996). Earnings and benefits of contingent and noncontingent workers. Monthly Labor Review, 119(1), 22-30.
6. Lawrence, T. (2012). Integrating contingent workers. Baseline, 114, 13.
7. Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. (2006). Human Resource Management. New York, NY: McGraw-Hill Irwin.
8. Pedulla, D. S. (2013). The hidden costs of contingency: Employers’ use of contingent workers and standard employees’ outcomes. Social Forces, 92(2), 639-663.
9. Tsui, A., & Gomez-Mejia, L. R. (1988). Human Resource Effectiveness. Washington, D.C.: The Bureau of National Affairs.
10. Society for Human Resource Management. (2017). Retrieved from [SHRM](https://www.shrm.org)