Total Rewards in the Public Sector

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Total Rewards in the Public Sector

• Karen G. Collins
• Palmer Cay

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Paradigm Shift

• Yesterday
• Cash Conservative
• Benefits Rich
• Job Security
• Work/life Balance
• Career Employees
• Team-Oriented

• Today Tomorrow
• Cash Competitive
• Benefits Conservative
• Staff Reductions
• Work/life Imbalance
• Job-Focused Employees
• Individual-Oriented

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Public Sector Characteristics

• Revolving Leadership
• Budget Driven
• High Tenure
• Diversity
• High Profile
• Labor Relations

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Total Rewards Definition

• Strategically focused approach that includes
  direct and indirect compensation programs to
  attract, develop, retain, recognize, and reward
  employees

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Total Rewards Focus

• Break entitlement philosophy
• Meet needs of diverse employee groups
• Improve recruitment and retention
• Increase employee morale
• Emphasize knowledge/skill acquisition
• Identify career paths
• Offset escalating cost of benefits

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Total Rewards Design
Compensation
Work Experience
Benefits

• Base pay
• Pay differentials
• On-call
• Overtime
• Variable pay
• Bonuses
• Incentives
• Gainsharing

• Health care
• Medical
• Dental
• Vision
• Prescription
• FSAs
• Retirement
• Paid time off
• Perquisites

• Learning development
• Career advancement
• Leadership management
• Recognition
• Challenge of work
• Employee activities
• Work/life balance
• Diversity

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Total Rewards Design
Understand
Assess
Strategize
Recommend

• Program changes to support TR
• Key issues requirements
• Communication strategy
• Implementation strategy

• Skills sets competencies
• current
• desired
• Gaps, key issues challenges
• Cost of turnover
• Performance

• Organizational strategy
• Customer needs
• Division objectives
• Current TR costs
• What employees value

• Structure rewards to attract retain
• Structure rewards to generate desired behaviors
• Associated cost
• Associated benefit

Business case for redesign of all or part of
total rewards program
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Total Rewards Misalignment

• Poor performance
• Low productivity
• High absenteeism
• Low employee morale
• High turnover among desired employees
• Inability to fill positions quickly
• Failure to change behaviors to support strategic
  plan(s)

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Total Rewards Cash

• Compensation Strategy
• Identify labor market(s)
• By job family
• Identify sources of market data
• Customized surveys
• Published surveys
• Establish benchmark jobs
• At least 50 of job titles
• Basis for internal equity

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Total Rewards Cash

• Salary Structure Development
• Fewer and broader open ranges
• Midpoint differential 8 to 20
• Salary range spread of 35 to 67
• Consolidation of job titles
• Address pay compression
• Annual update
• Consistent salary administration guidelines

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Total Rewards Cash

• Pay differentials
• Business case
• On-call pay
• Policy reduction
• Variable pay
• Bonuses vs. Incentives
• Gainsharing

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Total Rewards Cash

• Salary Administration
• Elimination of steps
• Increase as a percentage of midpoint
• Market v. budget
• Performance element

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Total Rewards Benefits

• Employee Healthcare
• Retiree Benefits Other than Pension
• Paid Time Off

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Total Rewards Benefits
Defined Contribution in Health Plans Employees
given money to buy benefits from options
Employeedirects fundsto plan choice Makes up
shortfalls or applies extra to other benefits
Employer defined and plan options
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Total Rewards Benefits

• Retiree GASB Financial Reporting of OPEB
• Elimination of pay as you go accounting
• Healthcare benefits medical, dental, vision and
  hearing
• Other forms of post employment benefits if
  provided separately from a pension plan
• Identify current exposure
• Plan re-design to minimize liability and yet
  maintain a valued benefit

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Total Rewards Benefits



PAID TIME OFF POOL

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Total Rewards Work Experience

• Leadership Management
• Training
• Accountability
• Diversity
• Demographics similar to community
• Identify and communicate career paths
• Sensitivity

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Total Rewards Work Experience

• Human Resources Policies and Procedures
• Formal and informal are the same
• Effective communication and training
• Challenge of Work
• Empowerment
• Customized to individual
• Cross-training
• Knowledge/skill acquisition

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Total Rewards Communication

• Customized to diverse audience
• Consistent implementation schedule
• Accountability for delivery
• Current vs. market
• Cash
• Benefits
• Work Experience

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Summary

• Aligning Total Rewards with your strategic plan
  and objectives will ensure you have
• the right talent
• doing the right things
• in the right way

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Thank You!
www.palmercay.com
Karen Collins 800 . 755 . 8927 ?
karen_collins_at_palmercay.com