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Measuring Organizational Success Through Total Rewards Programs in HR Management

Measuring Organizational Success Through Total Rewards Programs in HR Management

The practice of companies offering their own products to enhance the total compensation of their employees

Employee compensation is one of the most important things in an organization because it dictates the productivity of employees. According to Singhvi et al. (2018), employee compensation plays a significant role in shaping employment relationships because it influences how employees perceive their workplace and employers and how employers and organizations manage the cost of doing business and compete for employees in the labor market (Shields & Kaine, 2015). Companies with good compensation strategies are able to attract the best talent, hence increasing their chances of high productivity.

Employee compensation also focuses on balancing the work-employee relation by offering monetary and non-monetary benefits to increase employee motivation. Employees also develop job satisfaction and are more committed to their work when they are given satisfactory compensation (Hickey, 2013; Threadgill & Gable, 2016). Employers use various compensation systems that are aligned with their business objectives and strategic goals. One of the compensation strategies that companies are currently using to motivate employees and enhance long-term employee retention is using a company’s own products to enhance the total compensation of its employees (Brown, 2014).

Makey is among the companies that use company products to enhance the total compensation of its employees. Other companies such as L.L Bean have also managed to increase employee loyalty and commitment by compensating them using the company’s products. The practice includes allowing employees to use a company’s products for free or at a lower cost. For instance, a company providing insurance services may provide free insurance coverage for employees.

The prevalence of companies using their products to compensate employees in U.S. organizations

The practice is common in U.S organizations due to its effectiveness in enhancing job satisfaction and reducing employee turnover. Aflac insurance and L.L Bean are among the companies that have been using company products to compensate employees. Aflac insurance offers products to employees at no or little cost (Reed, 2009). For instance, the company offers employer-paid life insurance, which is a cancer policy paid by the company, and an accident protection insurance subsidized by the company. The company pays 100% of employee premium in alignment with its philanthropic commitment as a socially responsible company.

Benefits are offered following a needs assessment and measuring existing benefits through outcomes directly influenced by the company’s improved total rewards efforts. Aflac also dictates resources to efforts supporting the community in education, health, arts, and youth.L. L Bean provides its products to employees by providing an employee-use room for housing outdoor equipment such as hiking gear and kayaks for retirees and employees to use for free (Reed, 2009). The benefit is aimed at enhancing total quality because employees are encouraged to give feedback on how the products meet their intended use. Employees can therefore go for adventures together, thus facilitating team-building.

In my opinion, using a company’s products to compensate employees is a good idea due to various reasons. One of the main reasons is that it enables the company to improve its products because employees provide honest feedback on the product’s quality and ability to meet the intended purpose. The second reason is that it promotes employee commitment by giving employees a sense of belonging. When employees are allowed to use a company’s products, they feel proud of their work, especially if the product performs as expected and is of the right quality. They also feel that their efforts in the production process are yielding a good result hence creating a sense of belonging. The third reason is that it reduces employee turnover because employees are unwilling to lose the benefits or incur the cost of acquiring the product. For instance, if an insurance company offers its employees free health insurance, they may not be willing to leave the organization to avoid paying for the insurance, thus reducing employee turnover.

Recommendations regarding an expansion of the benefits programs offered at Makey’s

The current benefits program used by Makey company that involves using the company’s products can be expanded by using the total reward approach. According to Singhvi et al. (2018), total reward refers to a reward strategy incorporating additional components such as development and learning and working environment aspects into the benefits package. It offers a broader view of everything that an organization can offer its staff and what employees can offer the company, including the important change of management thinking model of the high-level superintendents of the company (Baral, 2014). The total reward approach includes two major categories. The first category incorporates direct and indirect incentives and pay, and the second category incorporates recognition, job security, challenging work, and growth opportunities.

Makey should introduce the total reward strategy to improve employees’ job satisfaction, work efficiencies, job performance, organizational citizenship behaviors, and psychological contracts. The approach will also enable the company to incline its benefits towards the organization’s vision. It will additionally enable the organization to adopt various approaches for different departments hence enhancing overall productivity. The total reward approach is also ideal for Makey company because it blends with the existing benefits program in different ways. First, the company’s benefits program is divided into intangible and tangible benefits. The tangible benefits in the application of the total reward approach would therefore incorporate health schemes, retirement benefits, disability, and life insurance. Intangible benefits would include other benefits such as career development, work-life balance, and recognition. Makey can also use the total reward approach to establish total remuneration on market values and the approaches used by competitor


Baral, S. (2014). Attracting and retaining talent – Total reward strategy. SSRN Electronic Journal.

Brown, D. (2014). The future of reward management. Compensation & Benefits Review, 46(3), 147-151.

Hickey, C. (2013). Reward guides attention to real-world object categories. PsycEXTRA Dataset.

Reed, S. M. (2009). Benefits and Business at Aflac and L.L. Bean. Society for Human Resource Management.

Shields, J., & Kaine, S. (2015). Performance and reward basics. Managing Employee Performance and Reward, 3-17.

Singhvi, A. S., Dhage, N. N., & Sharma, P. P. (2018). Compensation and its impact on motivation Employee‟s satisfaction and Employee‟s performance. International Academic Journal of Organizational Behavior and Human Resource Management, 05(02), 1-43.

Threadgill, A. H., & Gable, P. A. (2016). Approach-motivated pregoal states enhance the reward positivity. Psychophysiology, 53(5), 733-738.


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Module 3 – Case
Assignment Overview
Today’s HR professionals are expected to measure the success or failure of HR practices based on the achievement of organizational outcomes.

Measuring Organizational Success Through Total Rewards Programs in HR Management

Measuring Organizational Success Through Total Rewards Programs in HR Management

Brand identity, bottom-line profitability, employee job satisfaction, and increased management focus are all outcomes that can be achieved in part through an organization’s total rewards program.

This case examines a fictitious M. K. Makey organization and how it aligns its total rewards programs with its organizational goals and values.

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