Sears and Total Rewards Approach
How do the Sears changes reflect a total rewards approach? A total rewards approach can be implemented in a company to attract, engage, and retain employees. When designing an effective total rewards approach a mixture of five key elements are used to tailor a program that reinforces the overall business strategy of a company while ensuring organizational success for the future. These five key elements are: compensation, benefits, work life, performance and recognition, and finally development and career opportunities.
In an effort to become more competitive in the retail industry Sears implemented a new compensation system and revised their performance management system. The new compensation system embraces the total rewards approach because it integrates three of the five key elements: compensation, performance, and career development. Under the new system employees are rewarded for performance whereas the previous system rewarded employees for their length of service with the organization. Providing rewards based on performance is an effective way to attract new hires as well as motivate and retain current employees.
Discuss why Sears’ shift to a more performance-oriented compensation system had to be linked to market pricing. Market pricing is defined as the process of analyzing external salary survey data to establish the worth of jobs, as represented by the data, based upon the “scope” of the job (company, size, industry type, geography, etc). It was important for Sears to link their new performance-oriented compensation system to market pricing so that the company could be competitivc in its industry.
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