Alternative Reward Programs
The following information provides an overview of alternative reward approaches, including a definition of each approach, and the inherent advantages and disadvantages. Traditional alternative reward programs fall into one of two categories:
Individual Employee Oriented Programs:
Team Based Programs:
The success of any Alternative Reward Program requires that a number of different areas be addressed:
Strategic Considerations
- What are the desired goals?
- How realistic are the goals?
- Who will be affected?
- What resources are available?
- What is the level of management commitment?
- How will ARPs impact existing compensation?
Elements that must be present
- Open communication
- Capacity to administer
- Commitment to success
- Patience and perseverance
- Management commitment
- Clear-cut objectives and strategy
- Good management and employee relations
- Recognition of resources: time, expense, manpower
Key Design Steps of Alternative Reward Programs
- Initial analysis and problem definition
- Review of alternatives
- Selection of plan elements
- Test and finalize
- Review and approval
- Implementation
- Monitoring and refinement
Limitations of Alternative Reward Programs
- Imagination
- Fear of new and untested
- Ability to accurately forecast or budget
- Administrative ability of organization
- State of employee/management relations
Compensation Resources, Inc. has worked with many organizations to design a variety of customized alternative reward and recognition programs. For example, one particular program CRI implemented for a client company was called the Special Award Recognition Program (SARP) .
The plan objectives for this program were to:
- Recognize extraordinary employee contributions in the areas of effectiveness, quality of work, cost savings, productivity, personal sacrifice, acts of heroism, etc.
- Motivate employees to offer work improvement and cost savings ideas.
- Increase a sense of teamwork and fellowship among employees.
- Develop a greater sense of concern and ownership about the Company.
- Strengthen communications between employees and management.
- Provide a systematic method of identifying outstanding individual contributions.
- Provide financial rewards to employees who have demonstrated performance or contribution in excess of their assigned duties and responsibilities.
- Enhance the Company's ability to meet or exceed its target goals.
In defining the key objectives, CRI worked closely with this client to design a program that addressed each of these goals with compensation tied to the achievement of key performance factors.
To find out more on how Compensation Resources, Inc. can help your company with Alternative Reward Programs , please contact us or call us directly to speak with our compensation consultants at 877-934-0505.
