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					  University at Buffalo
  School of Management
Department of Organization and Human Resources


                                                                               Jerry M.
                                                                               Newman




                                                                       UTRA:

                                         What’s New In Total Rewards
  University at Buffalo
  School of Management
Department of Organization and Human Resources


                                                                         Jerry M.
                                                                         Newman




                                                 Total Rewards: Trends
                                                                                                   How Total Rewards fit in to the Big Picture

Jerry M.                                                                                                                                       where M= Motivation

Newman                                                                                        Behavior = f (M , A, E)                                A=Ability
                                                                                                                                                     E=Environment

                                                                                                                            Selection




                                                                                                                    Ability Triangle


                                                                                                             Recruitment                Training
                                           Department of Organization and Human Resources
                    School of Management
University at Buffalo




                                                                                               Performance Management                    Organizational Design




                                                                                               Motivation Triangle                         Environmental
                                                                                                                                              Triangle

                                                                                            Compensation          Culture       Org. Development           WFM
                                                                                                                                                           Planning

                                                                                                              Environmental Obstacles:
                                                                                                  Unions, Economic Conditions, Public Policy/Legislation
                                                                                           Reward Preferences 10 Yrs ago – What’s happening
                                                                                           Now? New Emphasis on “applicant as interviewer”
Jerry M.
                                                                                             SIN   USA               Reward                         Example
Newman
                                                                                              1     2    Compensation                 Wages, Commissions, Bonuses
                                                                                              4     6    Benefits                     Vacations, Health Insurance
                                                                                                   10    Social Interaction           Friendly Work Place
                                                                                                    7    Job Security                 Stable, Consistent Position
                                                                                              3     4    Status/Recognition           Respect, Prominence due to Work

                                                                                                    9    Work Variety                 Experience different tasks
                                                                                                   11    Work Load                    Right Amount of Work
                                            Department of Operations and Human Resources
                                           Department of Organizationand Human Resources
                    School of Management
University at Buffalo




                                                                                                   12    Work Importance              Is Work Valued by Society
                                                                                              5     9    Authority/Control/Autonomy   Influence Others, Contribute

                                                                                              2     1    Advancement Opportunity      Chance to get Ahead
                                                                                                    5    Feedback                     Information to Improve
                                                                                                                                      Performance
                                                                                              6    13    Development                  Opportunity to build new skills
                                                                                                    8    Work Conditions              Hazard Free
  University at Buffalo
  School of Management
Department of Organization and Human Resources


                                                                                   Jerry M.
                                                                                   Newman




                                                about reward preferences
                                            Trends in individual decision making
Jerry M.
Newman                                                                                      I. Increasing interest in Fairness as
                                                                                            Measured by internal equity

                                                                                            1. Distributive Justice
                                                                                               Major focus over last 2 decades
                                                                                            2. Procedural Justice
                                                                                               Increasing concern about slotting
                                           Department of Organization and Human Resources




                                                                                                And demonstration that criteria are
                    School of Management
University at Buffalo




                                                                                                Fair
                                                                                            3. Interactional Justice
                                                                                               Gen X,Y, Milennial much more
                                                                                                  concerned about consistency: McD
                                                                                                  as example of leader in this
Jerry M.
Newman
                                                                                            II.   Behavioral economics suggests
                                                                                                  individual decision making isn’t
                                                                                                  rational. What this means for you!

                                                                                                   a.  when it comes to complex choices
                                                                                            such as whether to save and when to retire,
                                           Department of Organization and Human Resources




                                                                                            people’s decisions are often influenced by
                    School of Management
University at Buffalo




                                                                                            social norms and the presentation of
                                                                                            their options—in addition to the “substance”
                                                                                            of the options themselves
                                                                                                       1. example: automatic defaults
Jerry M.
Newman                                                                                        a. people tend to stick with a default, even
                                                                                            when they can, at very low cost, pick another option

                                                                                                 eg. automatic enrollment dramatically
                                                                                            increases participation rates, especially for
                                                                                            low income subgroups where participation is very low
                                           Department of Organization and Human Resources




                                                                                                 45 percent of newly hired workers participated
                    School of Management
University at Buffalo




                                                                                                  in a 401(k) plan when doing so required opting in,
                                                                                                 but 86 percent did so when enrollment was
                                                                                                 automatic (25% v 75 % for low income groups)

                                                                                            Impact 1: rapid adoption of automatic enrollment plans
                                                                                            Impact 2: use defaults to increase savings rate over time
                                                                                                (3 percent inadequate, raise by default over time)
Jerry M.                                                                                    b.      Other possibilities
Newman                                                                                           1.   Default for IRA is automatic deposit of
                                                                                                      employee share (for those with no employer plan)
                                                                                                 2.   Default investment portfolios that are
                                                                                                      rationally diversified – reduces pension portfolio
                                                                                                      choices that are too narrow.
                                                                                                 3.   Automatically annuitize a large portion
                                                                                                      of pension so retirees won’t run out later in life
                                                                                                 4.   Health care defaults should reflect expert
                                           Department of Organization and Human Resources




                                                                                                      knowledge about optimum choices
                    School of Management
University at Buffalo




                                                                                                 5.   Demand evidence-based medicine (reduce impact
                                                                                                      of social norms on choices by doctors)

				
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posted:6/29/2012
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