REWARD AND RETAIN EMPLOYEES

A summary of best practices

Increasing talent shortages across industries and job functions have resulted in a greater focus
on employee retention efforts. Retaining high-potential and critical-skill talent is crucial to the
success of all organizations. Organizations can use this summary of Reward and retain
employees best practices to inform their efforts to reduce unwanted turnover, enhance
employee productivity, and lower compensation and benefits costs. APQC’s Process
Classification Framework® (PCF) divides human capital management (HCM) activities into the
categories depicted in Figure 1. This article will highlight best practices related to the Reward
and retain employees process.

(7.1) Develop and

(7.7) Manage
manage human (7.6) Redeploy and
employee information
resources planning, retire employees
and analytics
policies, and strategies

(7.8) Manage
(7.2) Recruit, source, (7.5) Reward and
employee
and select employees retain employees
communication

(7.3) Develop and (7.4) Manage (7.9) Deliver employee

counsel employees employee relations communications

Figure 1

PCF sub-processes related to rewarding and retaining employees include:

 7.5.1 Develop and manage reward, recognition, and motivation programs;
 7.5.2 Manage and administer benefits;
 7.5.3 Manage employee assistance and retention; and
 7.5.4 Administer payroll.

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 APQC’s 2015 Talent Trends Survey revealed the need for
organizations to differentiate employee rewards based on individual
performance, create a more positive organizational culture, and
reward employees for collaborating with peers.

(7.5.1) DEVELOP AND MANAGE REWARD, RECOGNITION, AND MOTIVATION

PROGRAMS
The Develop and manage reward, recognition, and motivation programs sub-process consists of
developing and administering a salary/compensation structure and plan, developing and
administering a benefits and reward plan, and ensuring that employees stay motivated.
Organizations that excel at this sub-process link compensation and rewards payouts to
behaviors that support key business objectives, leverage variable pay across the enterprise,
systematically recognize positive employee contributions, and customize benefits offerings to
employee needs.

Best practices for Developing and Managing Reward, Recognition, and Motivation Programs

 Designing compensation plans to reward key behaviors that support business goals (e.g.,
quality, service, customer satisfaction, innovation)
 Designing compensation plans that are market competitive and tailored to the
organization’s talent needs
 Using variable pay at all levels, with links to explicit and readily understood measures (e.g.,
corporate and divisional financial returns)
 Maintaining consistency and fairness in compensation across the organization
 Training managers on how to have effective rewards conversations with employees
 Driving awareness of the strategic plan through individual incentives
 Regularly recognizing employees for positive accomplishments
 Offering tangible and intangible forms of recognition at both the individual and team level
 Providing a flexible menu of benefits that is matched to the needs of current and projected
workforce demographics

(7.5.2) MANAGE AND ADMINISTER BENEFITS

The Manage and administer benefits sub-process involves delivering the employee benefits
program, administering benefits enrollment, processing claims, and performing benefits
reconciliation. Organizations that excel at this sub-process integrate HR systems, offer self-
service options for managers and employees to handle benefits, and provide ample tools to
educate employees on how to use their benefits.

Best practices for Managing and Administering Benefits

 Integrating talent management and core HR systems

 Allowing employee and manager self-service

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  Educating employees throughout the year (not just during open enrollment) about the
organization’s health care plans and other benefits
 Providing tools and resources to help employees plan for their retirement

(7.5.3) MANAGE EMPLOYEE ASSISTANCE AND RETENTION

The Manage employee assistance and retention sub-process consists of delivering programs to
support work/life balance for employees, developing family support systems, reviewing
retention and motivation indicators, and reviewing compensation plans. Organizations that
excel at this sub-process use employee satisfaction survey results and exit interview data to
make adjustments to reward and recognition programs. They also offer flexible work schedules
and strive to minimize employee stress.

Best practices for Managing Employee Assistance and Retention

 Having a process for analyzing employee satisfaction survey data and taking action based on
the results
 Using turnover and exit interview data to understand and mitigate retention issues
 Developing a comprehensive strategy to recognize and counter worker stress
 Providing flexible work schedule options

(7.5.4) ADMINISTER PAYROLL

The Administer payroll sub-process includes the activities related to maintaining and
administering employee earnings and deduction information, in order to keep employee data
current for preparing the payroll. These activities may be part of the HR or payroll function.

Best practices for Administering Payroll

 Having a centralized and integrated system of record for payroll data

 Offering employees self-service access to earnings and deduction information

CONCLUSION
The information provided in this article is designed as a starting point for organizations looking
to evaluate and improve their performance of the Reward and retain employees process. Once
an organization is familiar with reward and retention best practices, the next step is to conduct
a formal best practices assessment, enabling leadership to prioritize improvement activities and
formulate a plan of action. Organizations that take the time to evaluate and improve their
reward and retention practices are likely to see a range of positive outcomes, including a
reduction in unwanted turnover, an increase in employee productivity, and better use of
compensation and benefits budgets.

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 ABOUT APQC
APQC helps organizations work smarter, faster, and with greater confidence. It is the world’s
foremost authority in benchmarking, best practices, process and performance improvement,
and knowledge management. APQC’s unique structure as a member-based nonprofit makes it a
differentiator in the marketplace. APQC partners with more than 500 member organizations
worldwide in all industries. With more than 40 years of experience, APQC remains the world’s
leader in transforming organizations. Visit us at www.apqc.org, and learn how you can make
best practices your practices.

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