1. Callidus Sales Performance
Management Conference
San Diego, CA November 13, 2007
Are We Communicating? How To
“Sell” The Total Rewards Package…
Successfully!
John A. Rubino, President
Rubino Consulting Services
rubinoconsulting@aol.com
rubinoconsulting.com
2. Global Research
Consistently Shows That
Most Organizations Do A
Poor Job Of
Communicating With Their
Employees.
WHY????
3. Three Primary (Mega)
Objectives Of Managed
Communication:
Ensure Understanding
Get Buy-in/Change Perceptions
Motivate The Right Behaviors
4. Tools And Techniques For
Effective, Managed
Communication…
We can become more effective
communicators by observing and
learning from the world around us.
Who are the most effective
communicators in our society…and
what can we learn from them?
5. Communication Methodology
A Framework For Effective Communication
Step-by-step, managed approach…
Analyze The Current Situation
•
Define The Objectives
•
Establish The Key Messages
•
Conduct The Audience Research
•
Choose The Media
•
Strategy Implementation
•
Communication Evaluation
•
6. 1. Analyze The Current
Situation
Current State Future State
7. 2. Define The Communication
Objectives
The “SMAART” Approach
Specific
Measurable
Attainable
Audience-specific
Relevant
Tied to the business
8. Are These Communication
Objectives “SMAART”?
Objective 1:
“Inform employees of the Company’s
philosophy to be competitive in total
compensation”
Objective 2:
“Achieve an acceptance of the new managed
health care program by at least 75% of
eligible employees”
9. 3. Establish The Key
Messages
What Key Messages Should Be Conveyed?
(Linking Content To Objectives)
Communication Key Messages
Objectives (Content)
10. What Are The Key Messages?
Objective: Increase “paid fairly”
perceptions from 56% to at least 70%
Both employer and employee benefit
Company devotes substantial resources
to achieve fair pay
Fair pay is individually subjective and
organizationally objective
What is fair depends on your point of
view
11. 4. Conduct The Audience
Research
Questions To Be Answered During Audience
Research:
Who are your audiences?
What is the current level of understanding?
What is the fit to culture and corporate philosophy?
How does this project fit with recent or upcoming changes?
Are communication messages consistent?
Do managers have the necessary “people” skills?
Is the performance-to-reward connection clear?
How does senior management view communication?
What is the employees relations climate?
Are global considerations an issue?
12. 5. Choose The Media
Many Choices, Many Combinations
Print
Internet/Intranet
Presentation Software
Group Meetings
One-On-One
Video
Interactive PC Software
Workshops/Study Groups
**Steps 6 and 7 (implementation and evaluation) are
explained in the ‘example’ to follow**
13. Coca-Cola Enterprises, Inc.
Total Rewards Statement
“Everything of value that comes from the organization to the
employees” (personalized)
Total payroll costs, and a breakdown of all benefit expenses
Your Total Compensation: base, bonus, benefits (coke’s share
and your share)
Paid time off
Retirement benefits, with an interactive ‘calculator’
Wellness programs: descriptions and their value, monetary
and non-monetary
Disability Insurance (company and individual cost)
Life insurance
Educational assistance, scholarship programs, adoption
assistance, purchase programs, ESSP, etc.
14. Sun Trust Banks, Inc.
Broad-Based Stock Option Program
“Think Like An Owner” “How Can Sun Trust Help You?”
What is a stock option?
Types of stock options (ISOs & NQOs)
How you benefit from stock ownership
Three ways to exercise your option
Know your tax situation (tax implications of stock options,
contrasting ISOs and NQOs)
Frequently Asked Questions
Consult an advisor!
Who to contact at Sun Trust
15. Communication Methodology
For The New Total Reward
Strategy (‘Example’)
Current Situation: The organization is transforming its
reward strategy away from a traditional job-based system
(merit increases) towards incentive compensation for all
employees. This will require significant cultural change as
well as the establishment of new behaviors that define
success. The ‘entitlement mentality’ will be abolished, and
monetary rewards will be variable based on performance —
a marked distinction between those who go “above and
beyond” and those who do not. Executives and managers
will model the new behaviors and establish performance
goals that are discernable, valid and measurable.
16. Communication Methodology
For The New Total Reward
Strategy
Communication Objective: In order to
ensure understanding and acceptance by
ALL employees of the changes in the
organization’s reward strategies, emphasize
variability based on performance and de-
emphasize the entitlement mentality, in order
to align the new desired behaviors with the
new organizational values.
17. Communication Methodology
For The New Total Reward
Strategy
Key Messages:
Communicate the new behavioral models that must be
demonstrated by all employees. These behaviors are directly
aligned with the articulated organizational values and core
competencies;
Communicate the importance of job ownership and personal
responsibility with regard to work performance;
Thoroughly explain the new incentive compensation reward
mechanisms, emphasizing variability based on
performance…
18. Communication Methodology
For the New Total Reward
Strategy
Audience Research: Because the introduction of
the new incentive compensation plan represents
significant cultural change, it is imperative that
management and employee acceptance and buy-
in be accomplished in a complete and systematic
manner. The first step to achieve this objective is
an audience research approach which “casts a
wide net” and will serve both as an information-
gathering exercise as well as an educational
forum.
19. Communication Methodology
For the New Total Reward
Strategy
Audience Research (continued):
A written questionnaire (paper- and/or intranet-base)
distributed to all employees. The survey will capture the
degree of understanding and acceptance by the employees
of the new behaviors and reward strategies;
Using tabulated survey results, focus groups will be formed
to delve deeper into topic areas of most concern;
Manager and employee study groups will be formed to get
“brainstorming” input on the implementation of the new
reward strategies.
20. Communication Methodology
For the New Total Reward
Strategy
Media and Strategy Implementation: To
support the new culture, behaviors and
reward strategies, the media and
implementation approaches
must be thorough
and “human”
oriented.
21. Communication Methodology
For The New Total Reward
Strategy
Media and Strategy Implementation (continued):
A video…recognizing and demonstrating the emotionality of the subject
matter;
Written materials (plan documents): a detailed explanation, with
examples, of the new incentive compensation plan;
Face-to-face meetings throughout the organization conducted by well-
trained managers and assisted by program designers from human
resources. In order to achieve the stated communication objective, all
employees will have an opportunity to participate in two-way, “real time”
presentations;
Working/training/education sessions for all managers and employees to
help them establish performance goals and behavioral guidelines under
the new reward strategies.
Additional information and Q&A follow-up through the intranet (HR
website).
22. Communication Methodology
For The New Total Reward
Strategy
Communication Evaluation:
Four to six months after the new incentive
compensation plan goes “live”, re-survey the
managers and employees and reconvene the focus
groups in order to conduct a ‘before’ and ‘after’
comparison. Also, all managers will submit a written
assessment to human resources on the degree of
success of the communication effort.
23. Communication Methodology
For The New Total Reward
Strategy
Communication Evaluation (continued):
Strategic questions to be answered by citing specific
examples…
Are employees demonstrating and ‘internalizing’ the new
competencies and behaviors?
Is the new incentive compensation plan perceived as fair?
Are performance goals and criteria being adhered to and,
most importantly, accomplished?
Are employees taking ownership of their jobs and career
development?
24. The Total Rewards
Package…
**It All Starts With EFFECTIVE
PERFORMANCE
MANAGEMENT**
**Performance Management Needs To
Be At The Core Of Everything That
We Do!**
25. The Goal of Performance
Management
The ultimate goal of a performance
management system is improved
organizational performance.
Performance management works to achieve
consensus, cultivate continuous
improvement, support relationships, and
ensure that the entire organization is
focused on achieving the desired results.
26. The Rationale for
Performance Management
Foster cultural change, link pay to
performance, identify training needs,
empower managers, and motivate the
work force.
Improve profit, performance, customer
service, efficiency, competence and
quality.
27. What Is Successful
Performance
Management?
Performance management is a managerial process
that consists of planning, managing, improving,
appraising, and rewarding performance.
It is a dynamic process that cascades throughout
the various levels of the organization, utilizing
observation, feedback, development and many
other tools and approaches to maximize
organizational performance.
28. What Is Unsuccessful
Performance
Management?
Organizational performance philosophy not
‘determined and articulated’.
Performance criteria established in a ‘vacuum’ --- no
alignment.
Primary concentration on the evaluation ‘form’.
No consistency in management ‘thought and
application’ throughout the organization.
Middle managers not a ‘quality group’.
29. Performance Management:
A Continuous Process
Plan – defines what is important to the organization,
and what needs to be done.
Act – refers to the day-to-day activities and ongoing
developmental steps taken to accomplish the plan.
Monitor – refers to the responsibility of leaders and
managers to track, coach and develop.
Review –formal assessment and feedback.
30. Effective Performance Management:
The ‘Cascading’ Approach
• Corporate criteria are always quantitative: measures how the organization
defines financial/operational success (2 or 3 criteria).
• Also, develop “Qualitative” Corporate Goals (QCG’s): organizational-
wide business & operational objectives for the upcoming performance
period.
• QCG’s are used to “cascade” Departmental and Individual/Team Goals.
Departmental and Individual/Team Goals should be both
quantitative and qualitative:
• Criteria must be valid, discernible and measurable and, if applicable, with
milestone dates.
--- No more than four to six criteria per category.
--- Narrative rating scale can be used to assess qualitative criteria.
31. Total Rewards Objectives: We Want to
Create and Support…
Employees who are focused on adding value to the
business by meeting/exceeding performance expectations.
True employee “ownership”.
Retention and motivation of productive employees.
A good “sell” to top candidates; a compelling reason to join
the company.
A marked distinction between those who go “above and
beyond” and those who do not.
An environment that discourages the entitlement mentality.
An appropriate mix between base salary, variable
opportunities, and all other components of the total rewards
strategy.
33. 1. A Successful Plan Is Aligned
With Organizational
Culture/Values
Culture and values must support a total rewards &
incentive framework: instilling a
“Sales Mentality”
Senior management must allow the
program to work
Should have “Pay By Example” at the top
of the organization
34. 1. A Successful Plan Is Fair to
Employees
Must be internally equitable and
externally competitive
Performance criteria must be discernible,
valid and understandable
Program must deliver what is promised
on time and fairly
35. 1. A Successful Plan Is Fair to
the Organization
Should work towards self-funding
Organization should be relatively
profitable when the program is initiated
Plan design should guard against
“windfall” payments
36. 1. A Successful Plan Sets Total
Compensation (Total Rewards)
Compensation policy must be aligned with
total rewards and strategic objectives
Variable pay should be directly tied to
performance criteria achievement: direct line-of-sight
Consider re-defining what is meant by a
base salary increase
37. 1. A Successful Plan Yields Financial
Returns to Employees
Variable pay opportunities must be
perceived as “substantial”
enough to motivate performance
Timing of variable payments should be as close
as possible to the qualifying event
If designed properly, payouts to employees will yield
“slices from an expanding financial pie”
38. 6. A Successful Plan Yields
Financial Returns to the Company
A well-designed and executed total rewards plan can improve
the organization’s bottom line.
Measurable benefits can include improved:
- Morale - On-time
Performance
- Productivity - Work Methods
- Quality - Etc., Etc., Etc.
- Customer Service
39. 7. A Successful Plan Involves
Employees And Managers
Middle managers will make or break
the total rewards plan
Must get buy-in from employees
Should involve employees and managers in the plan
design, including identification of performance criteria
Build trust!
40. 1. A Successful Plan Uses
Internal And External Data
Collect and analyze accurate and
valid competitive data
Build the total rewards plan from a
“rational” base pay foundation
Base salary serves as the anchor in total
rewards planning
41. 9 (a). A Successful Plan Sets
Forth Clear Performance Goals
Performance criteria in successful
programs are:
- “cascading”
- a combination of
quantitative and qualitative measures
- simple to understand
- supported by valid data
- monitored through strong controls
42. 9 (b). A Successful Plan Sets Forth
Clear Performance Goals
Aligning rewards to performance
requires the following:
- a clear (and clearly-perceived)
relationship between pay and performance
- predictable measures of performance
- visible benefits to the employees and the
organization
- regular formal and informal performance
feedback
43. 1. A Successful Plan Achieves
Clarity Through Communication
Communication mega-objectives:
- to ensure understanding
- to change perceptions
(get buy-in)
- to motivate behavior
Even the most elegantly-designed variable program will
not achieve the desired results unless employees and
managers understand and, ultimately, buy into the
program
45. VARIABLE PLAN Performance
Criteria (example)
Corporate criteria (Quantitative):
NET INCOME
(% growth over previous year)
Criteria Payout
MAXIMUM >=17% 150%
TARGET 12% 100%
THRESHOLD 9% 50%
<9% 0
(Interpolate for points in-between)
46. Seven Steps to a
MOTIVATION-FREE Total
Reward Package
Be sure no one quite knows what his/her job is
Keep selection and promotional criteria vague
Don’t tie yourself or employees to tangible goals
Be vague about who measures performance and how
Keep salary ranges, increase percentages, incentive
guidelines, and most components of total rewards secret
Surprise employees with a bigger paycheck or lump-
sum/spot award
Be defensive when asked to explain and defend human
resources actions
