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Today’s Objectives

Today’s Objectives. Discuss the concept of Total Rewards at ServiceMaster. 1. 2. 3. Understand the key components of ServiceMaster’s total reward package. Understand how this concept can help to attract, retain, and motivate ServiceMaster Associates. Components of Total Rewards.

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Today’s Objectives

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  1. Today’s Objectives Discuss the concept of Total Rewards at ServiceMaster 1 2 3 Understand the key components of ServiceMaster’s total reward package Understand how this concept can help to attract, retain, and motivate ServiceMaster Associates

  2. Components of Total Rewards

  3. Compensation Components of Total Rewards • Compensation • Base Pay • Variable Pay • Short-Term Incentives • Production commission • Sales commission • Monthly, Quarterly, or Annual Bonuses • Long-Term Incentives • Stock grants • Special Recognition Awards Programs TTC – Total Target Compensation TCC – Total Cash Compensation

  4. Base Pay • Base pay can be expressed multiple ways • Annual Rate - $26,000 per year • Weekly Rate - $500 per week • Hourly Rate - $12.50 per hour • Monthly Draw Amount - $2,165 per month • Traditionally, the base pay is what is used when comparing the financial value of a job This can be very misleading in companies that offer a robust total rewards package

  5. Variable Pay: Short-Term Incentives • Short-Term incentives are measured as a percentage of base pay: • Production commission (15% to 75%+) • Terminix Technicians & Merry Maids Team Members • Actual Dollars Earned • Sales commission (20% to 75%+) • Residential Sales • Call Center Sales • Commercial Sales • Monthly, Quarterly, or Annual Bonuses (10% to 50%+) • Target Percentage of Base Pay • Sales Managers – Monthly or Quarterly • Non-Sales Managers - Annual

  6. Variable Pay: Long-Term Incentives / Recognition • Long-Term Incentives • Executive Level Management • Value matures in the future (Vesting) • Used for retention purposes and long term strategy • Recognition Programs • President’s Club • Awards of Excellence • Ongoing recognition awards Can be difficult to quantify, but are opportunities to earn

  7. Example 1: Branch Manager Branch Manager Base salary - $75,000 Bonus Target – 25% Total Target Cash (TTC) $93,750 Base X (1 + 25%) = $75,000 X 1.25 = $93,750

  8. Example 2: Sales Representative Sales Representative Base salary - $25,000 Bonus Target – 50% Total Target Cash (TTC) $37,500 Base X (1 + 50%) = $25,000 X 1.5 = $37,500

  9. Communicating Key Messages • Compensation is more than just base pay • The incentive component can have a significant impact on total compensation • Total Target Compensation is different than Total Cash Compensation Total Target Comp = Base Salary X (1+Bonus Percent)

  10. Core Health & Welfare Benefits Key Concepts • Group coverage with guaranteed issue • ER accepts risk of high claims (Self Insured) • Highly inflationary • Pre-tax to EE

  11. Life & Disability Benefits • Key Points • Provide income protection to you during protracted illness or income to your family upon death • Guaranteed issue with opportunity to buy up

  12. Retirement Benefits Key Concepts • Pre-tax benefit to EE • Built-in return on investment • Can be critical to talent attraction

  13. Supplemental Benefits • Total Plan Cost: $700,000 • Includes Tuition Reimbursement, Employee Assistance Program, Wellness Initiatives, Hyatt Legal, Business Travel Insurance, Employee Discounts • Less well known, less well used but highly valued to those who do participate

  14. Total Rewards $ • Total Target Comp = Base salary X (1+Incentive%) • Total Benefits Value = Base salary X (1+17%) • ServiceMaster Total Rewards = Base Salary X (1 + Incentive% + 17%)

  15. Example 1: Branch Manager • Participates in 401(k) • Covers family on regular H&W plans • Total Reward Package = • $75,000 X (1+25%+17%) = $106,500 • $31,500 additional value beyond Base Rate Branch Manager

  16. Example 2: Sales Representative Sales Representative • Participates in 401(k) • Covers family on regular H&W plans Total Reward Package = $25,000 X (1+50%+17%) = $41,750 • $16,750 additional value beyond Base Rate

  17. Applying Total Rewards Attract • Talent Acquisition & Managers – New Hire Candidates Retain • Managers & HR Managers • Retaining Associates Motivate • Managers & Leadership • Merit Awards, Annual Pay Plans and Benefits Programs

  18. Final Thoughts New Hire costs are more than just base pay Total Reward $ Base Pay x [1+ Incentive Target % + 17%] When communicated effectively, ServiceMaster’s Total Rewards concept is a compelling way to attract, motivate and retain our talent

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