Rewards and Motivation
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Rewards and Motivation
U.S. companies face greater pressures today than ever before to improve cost efficiency and in the same breathe taking their products to market faster, cheaper and with stronger innovation, regulatory compliance, responding to ever increasing regulations around the world that often conflict with each other. A company must also be nimble enough to change direction quickly and cost-effectively when market conditions shift. At the same time, they still must provide an environment in which people want to be employed and want to excel. This is where old models for rewards management fall flat and new rewards approaches must be implemented to make a more efficient and productive organization. (Chang) The company that will be referred to throughout this paper is the authors current employer, Walgreens Corporation. In todays business environment, attracting, retaining and motivating the kind of people who can sustain a fast-growing organization requires most companies to think differently about how they pay their employees and this is true for Walgreens. The thought process to reflect this change is concerns the shift from compensation to rewards or the merger of both. When speaking to an HR representative within the department, it was made clear that the company objectives are results-focused and the weight of reward programs have increased to compensate.
Walgreens views base pay as the price pay for membership to the company. Base pay ensures the company that the employee will show up at work, that they may call employees night or weekends with business questions, that they can send them employees out of town and disrupt their personal life. But incentive pay or rewards is the price you pay to get employees focused on what is important to the company. For example, several years ago on the store operations level a flat rate was provided for the positions of Executive managers and storeowners across the board in the relation to annual bonuses allocated. For examples, two hundred dollars and seven hundred dollars respectively were issued on a monthly basis for these positions. However, rather than help productivity it had little effect and essentially did nothing to improve the bottom line for the corporation because managers felt that this allocated amount was just another structured payment (like base pay) and put the equivalent amount of effort into performance as before the implementation of this compensation. However, the company realized that the bonuses that were based on a regional performance data with lateral compensation, which was not beneficial for the company, and therefore realigned, the companys objectives with the reward system in place. Key performance indicators (KPIs) were developed so that on the store level the managers would be able to observe statistics and analytical data pertaining to the store such as P & L statements, Historical inventory data, Rx, Lost prevention and countless other parameters. With this data managers were able to discover gaps in statements and therefore implement action plan to improve them. Based on graded KPIs, sales improvement, gross profit improvement, inventory and expense control; the company was able to arrive to a quantitative formula that bonuses would be based upon that were better aligned with the companies business objectives. With this approach the current reward system better motivates managers better manage employees and essentially perform because their bonuses better reflected their effort sewn. I believe that it is a good program because it truly highlights the a managers knowledge of the systems and programs used to create a improvement within an establishment and one is rewarded for their knowledge and management; this also allows for performers to shine and be more easily recognized when time for promotions, so great deal of pride is instilled into the management whose long hours dont go in vain.
Walgreens Rewards and compensation system does not discontinue there but rather stems out to many various components that solidify an excellent total compensation package for its employees. Walgreens has a system that they believe will appropriately reward their employees for loyalty and productivity. It begins with monetary pay, also known as base pay were it is competitively structured and adjusted in comparison to the industry and its direct/indirect competitors. A form of gain-share is used where additional money is disbursed for ideas that are cost effective or that help increase sales. This is accomplished through employees suggestion, where ideas whether they are cost reductive or generate sales are reviewed and if worthy, money is issued in the amount ranging from one hundred dollars to ten thousand dollars. Show and sell is a program where idea for merchandising is rewarded and then used in the corporate published marketing guide that is dispersed monthly to give ideas for sales company wide. Long-term compensation is offered to employees despite position in the form of profit sharing where an employee can set up an account to save for retirement by depositing a potion of their salary. Currently Walgreens matches every dollar invested into profit sharing by $3.35. Amazing! Along the same wave length of long-term compensation stock purchase plans are available where employees with one year of service and 1000 hours worked can purchase stock at a 10% discount