Compensation: Connecting Strategy & Rewards

My last newsletter article talked about the importance of taking a strategic approach to compensation. I commented that two distinctly different business strategies would necessarily have very different compensation approaches. A natural question: “What might the two different compensation approaches look like?” Was sent by a reader. The following is one example of what the differences might look like.

In designing the Total Reward Package for any organization two key elements not pursued in this example are the leadership and culture of the two organizations. Understanding those two factors is fundamental to developing a total compensation strategy and process that will support organizational success.

To be effective, a reward package must be designed to satisfy the needs of the people in the organization, which requires an understanding of what motivates that group of people. As organizations grow so do the differences in the needs of the employees. To create successful reward programs that attract and contribute to the retention of workers in today’s competitive environment compensation specialists need to

• understand what the motivators are for their full spectrum of workers and
•  design total reward programs that creates satisfaction for everyone.

With a workforce of four multicultural generations, doing so becomes ever more challenging. Numerous, and at times conflicting, theories of human motivation can make the proverbial needle in the haystack seem simpler to find than the foundation for a successful rewards program.

What we do know is that rewards need to be flexible enough to allow for individual customization, consistent enough to ensure both perceived and real internal equity, significant enough to attract attention in the external environment, while still driving the performance and having the affordability and usability required to achieve organizational success. A challenge to be sure!

Looking for more information or need some help with these or other HR issues? Please get in touch.

 

News
Bill C-45, enacted March 31, 2004 is a series of amendments to the Canadian Criminal Code (not Occupational Health & Safety law) which says that every person “who undertakes, or has the authority, to direct how another person does work or performs a task” must “take reasonable steps” to protect the worker or other person against bodily harm arising out of the work.

Before Bill C-45, employers who did something that was prohibited or failed to do something required and the act or omission was a “wanton or reckless disregard for the lives or safety” of others could be charged under the Criminal Negligence section of the Criminal Code.

Under Bill C-45 the law goes beyond negligence to establishing a duty to protect workers.

What does it mean? If a worker suffers a serious injury or illness because of the workplace environment or accidents, it could result in criminal penalties for the organization and individuals within it.

This means that it is possible for Employees who:

• have control over who does a job and/or the tools or methods used to do the job
• train supervisors or workers on how to perform the job
• have authority to stop work because it is unsafe

to be charged and punished under the Criminal Code.

A Plain Language Guide to Bill C-45 is available on the Department of Justice Web site at: www.canada.justice.gc.ca/en/dept/pub/c45/index.html.

Compensation
Early projections for 2006 are that range increases of about 3.5% - 4% are likely.

The increase of Alberta’s minimum wage from $5.90 to $7.00 will occur effective September 1, 2005. $7.00 per hour is equivalent to $14,560. per year for a 40 hour workweek. The average hourly wage rate in Alberta is $18.55 or $38,584 per year for a 40-hour workweek.

Workforce Information
The TD Financial Group in their Annual Economic Forecast is projecting real GDP growth for the three western provinces at:

Continued growth equates to continued demand for talent. When a growing economy is combined with a slow growth aging population that demand for talent is going to become extreme.

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