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UTRA: What’s New In Total Rewards

UTRA: What’s New In Total Rewards. Total Rewards: Trends. How Total Rewards fit in to the Big Picture. Behavior =. where. M= Motivation A=Ability E=Environment. Selection. Ability Triangle. Recruitment. Training. Performance Management. Organizational Design. Environmental Triangle.

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UTRA: What’s New In Total Rewards

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  1. UTRA:What’s New In Total Rewards

  2. Total Rewards: Trends

  3. How Total Rewards fit in to the Big Picture Behavior = where M= Motivation A=Ability E=Environment Selection Ability Triangle Recruitment Training Performance Management Organizational Design Environmental Triangle Motivation Triangle Compensation Culture Org. Development WFM Planning Environmental Obstacles: Unions, Economic Conditions, Public Policy/Legislation

  4. Reward Preferences 10 Yrs ago – What’s happening Now? New Emphasis on “applicant as interviewer” Jerry M. Newman University at Buffalo School of Management Department of Operations and Human Resources

  5. Trends in individual decision making about reward preferences

  6. I. Increasing interest in Fairness as • Measured by internal equity • Distributive Justice • Major focus over last 2 decades • Procedural Justice • Increasing concern about slotting And demonstration that criteria are Fair • Interactional Justice • Gen X,Y, Milennial much more • concerned about consistency: McD • as example of leader in this

  7. 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, • people’s decisions are often influenced by • social norms and the presentation of • their options—in addition to the “substance” • of the options themselves • 1. example: automatic defaults

  8. 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 • 45 percent of newly hired workers participated • 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)

  9. Other possibilities • Default for IRA is automatic deposit of • employee share (for those with no employer plan) • Default investment portfolios that are • rationally diversified – reduces pension portfolio • choices that are too narrow. • Automatically annuitize a large portion • of pension so retirees won’t run out later in life • Health care defaults should reflect expert • knowledge about optimum choices • 5. Demand evidence-based medicine (reduce impact • of social norms on choices by doctors)

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