Kaplan, S. (2009). Business Strategy, People Strategy and Total Rewards. Benefits and Compensation Digest Vol. 44: 7, (12-19). Retrieved from http://www.diamond-consultinggroup.com/pdf/Stacey_Kaplan_Total_Rewards_And_Business_Strategy.pdf
The article outlines ways on how the human resource manager needs to integrate the people and business related strategies before implementing a reward program that benefits both the employees and the business. The author criticizes the method that most HR personnel use to provide benefits to the employees whereby some human resource managers just implement a reward program because it is being used in another organization. The author laments that it is important first to determine the compatibility of a given compensation and benefits program with the employee needs as well as the organization’s mission and vision statements. As a way of ensuring this compatibility, Kaplan has provided a suitable process that HR managers should understand wholly before coming up with the benefits program. The process involves first getting to know the business care strategies and mission that the organization wish to achieve, and then identify and understand different needs of the employees. The final step involves determining suitable benefits and compensation plan that combines the first two needs as well as monitor its progress in relation to the previous two steps.
Understanding the business strategies as Kaplan (2009, p. 13) indicates, involves understanding the company’s future direction by understanding the mission vision and value statements. In addition, it is essential to outline the core purpose and direction of the business in order to determine the applicable resources and competitive strategies that the organization needs to implement in achieving the set goals and strategies. Other than understanding the core strategies, the HR also need to understand other key aspects that defines a business such as the organizational culture, conduct SWOT analysis, as well as the workforce capabilities in driving the business into achieving the set goals and objective. Understanding these aspects as the author notes, helps the HR in understanding the people strategy that is essential in selecting the appropriate benefits plan.
People’s strategy, on the other hand, involves aligning the employees’ capabilities with a set business strategy so as to achieve the set goals. People strategy involves identifying the skills and personal qualifications for specific tasks, costs of employing the personnel as well as the training method necessary to nurture the employees into achieving the organization goals. After the HR has identified different business and people strategies, they must then come up with a total rewards system that aligns both the people and business expectations. As the author states, total reward involves things that employees want in an organization and these includes benefits, compensations, favorable work environment and personal developments. While benefits and compensation involve monetary reward, development involves training provided to nurture the employee skills while favorable work environment involves making the employees feel that they are part of the organization. The author states that it is essential to implement these four key reward components collectively. This ensures that employees achieve job satisfaction and also reduce chances of the employees seeking employment opportunities from the competitors.
As the article indicates, the total rewards process is an essential competitive tool that Human resource personnel must implement with a careful consideration for the various aspects affecting the business. It is essential for the HR to balance the four elements of reward plan instead of focusing mostly on monetary rewards only. This is because; employee satisfaction is achieved through other factors such as favorable culture, teamwork and effective communications system within the organization rather than the monetary rewards they get from the company.
