Total Reward Final

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Jan 9, 2024

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9.1 Final Project: Total Rewards Analysis Total Reward Final Project Benefits and Compensation Analysis Diana Nunez November 19, 2023 1

9.1 Final Project: Total Rewards Analysis Issues Analysis The possibility of remote work is the main source of concern. A significant 10% of the workforce has stated that being able to work from home is one of their top priorities. Furthermore, a significant 67% of the organization's staff members are between the ages of 31 and 50. It's important to keep in mind that people in this age bracket are frequently in the process of establishing kids and buying homes. Consequently, they place a high priority on creating a healthy work-life balance. Providing an illustrated scenario, an employee complained that their lengthy work hours prevent them from spending time with their small child. Their son is asleep when they get home from work. It's essential to note that not every employee is covered under the existing work-from- home policy. Instead, it is only accessible to scientists and data analysts who fulfill certain requirements linked to their jobs. Increasing the number of remote work possibilities could significantly boost employee satisfaction and retention. The 10% of those employed has stated that their top priority is compensation. There is a noticeable difference between Emerging Pharmaceuticals' compensation rates and those of its rival, Medtronic. In general, Emerging Pharmaceuticals provides compensation that is between $5,000 and $10,000 less than the mean wage for each position at Medtronic. Employees may undoubtedly use this gap as their main motivation to think about leaving the organization. It's important to remember that the majority of the employees at Emerging Pharmaceuticals consists of people who are actively looking to buy homes and support their families. In such circumstances, competitive pay becomes essential because it gives workers the security they need to properly support their families. Nine percent of our employees have voiced worries about professional growth. One worker described a particular difficulty he has in his quest for job progression. He indicated that 2

9.1 Final Project: Total Rewards Analysis getting a degree would be necessary for him to be eligible for a promotion. Achieving this educational milestone, however, is quite difficult because of the combination of very low wages and a weak tuition reimbursement program. Our tuition reimbursement program provides help of up to $2,000 for undergraduate programs and up to $3,500 for graduate degrees, just to give you some context. The employee emphasized that this aid would only help with textbook expenses, leaving substantial financial obstacles in the way of achieving the requirements for a promotion. Another important concern about benefits and healthcare has been raised by workers. The extra fee charged when adding a spouse or family member to the healthcare plan is one significant problem. A wellness initiative designed to promote healthy behaviors among staff members who place a high priority on their well-being is also noticeably lacking. It's crucial to recognize that employees are likely to look for healthcare solutions that are both reasonable and comprehensive for their entire families given the demographic that makes up the majority of our workforce. At the moment, it seems that Emerging Pharmaceuticals' healthcare services are more individualized. Also, the lack of a wellness incentive implies that there is no way for employees to actively help lower their healthcare expenses. Targeted to Addresses Given the company's employee retention goals and the demographics of its employees, Emerging Pharmaceuticals should prioritize improving employee work-life balance as well as their benefits and pay scale. As employees age, their priorities eventually turn towards their families in search of stability as well as chances for career and financial advancement. I think Emerging Pharmaceuticals should prioritize increasing work-life balance, with an emphasis on reevaluating their policy on remote work in particular. The company may be able to 3

9.1 Final Project: Total Rewards Analysis improve employee morale, lower travel expenses, and promote a better work-life balance by modifying this policy to provide all employees the option of working from home. For increased flexibility, employees would give up between 2.6% and 5.1 % of their pay (Freedman, 2023), flexibility is more important to half of the workers than pay. The business should also look into the idea of adding wellness incentives to its benefits program. In addition to promoting better lifestyles among employees, the initiative would also honor and reward individuals who already put their health first. Programs that promote employee wellbeing are advantageous for both employers and employees, as well as for the overall success of the business (Team Loop, 2022). They boost employee engagement, develop a positive workplace culture that prioritizes employee wellbeing, and over time, they support the expansion of the business (Team Loop, 2022). The business now lacks strong incentives to keep long-term personnel. Employee unhappiness results from the fact that the current pay is below industry average and the benefits provided are insufficient to make up for this deficiency. Also, the existing Paid Time Off (PTO) plan expires after ten years of employment and the pension plan has few benefits and no employer match. Ten years of service should be a significant milestone for both the organization and the individuals, deserving of acknowledgement rather than going unnoticed. Employees are not particularly encouraged by the current system to commit to long-term employment with the company. It is advisable for Emerging Pharmaceuticals to have employee retention programs that reward significant corporate accomplishments. This will encourage employee retention. This strategy would remove the myth that long-term employment eventually causes benefits to run out. External Benchmarking Data 4

9.1 Final Project: Total Rewards Analysis The absence of a Health Savings Account (HSA) at Emerging Pharmaceuticals stands out when comparing the benefits packages provided by Medtronic and that company. In essence, HSA is a personal savings account that can only be used for qualified medical expenses (Folger, 2023). Although Emerging Pharmaceuticals does provide slightly more cheap health benefits, it is less flexible and incapable of adapting to the changing needs of all employees. For more features and alternatives, some employees might be ready to pay a little bit extra for their benefits package. That is why Emerging Pharmaceuticals needs to think about developing wellness initiatives and providing HSAs in order to help defray the increased expense and give staff members comprehensive benefits that address a larger range of demands. Further, Medtronic has a rewards program in place to encourage employees to live better lifestyles. These incentives come in the form of points that may be acquired and exchanged for items like gadgets, apparel, athletic equipment, and books. Higher degrees of performance allow employees to access more benefits, including the opportunity for free medical premiums. Additionally, Medtronic employees who are insured by the company's medical plan are eligible to receive a $20 monthly discount on gym dues. By providing a 50% match on the first 6% of deposits in their 401(k) account, Medtronic demonstrates its commitment to employee financial wellbeing. The Medtronic Core Contribution is a separate additional contribution. A second beneficial perk offered by Medtronic is an employee stock purchase plan, which not only helps staff members secure their financial futures but also links company performance to that of its personnel. The difference between the companies' Paid Time Off (PTO) policies is fairly obvious when we compare them. A total of 20 days of paid time off are provided to Medtronic employees as soon as they start working there. As opposed to Medtronic, Emerging Pharmaceuticals only 5

9.1 Final Project: Total Rewards Analysis gives 10 days of PTO as a starting point, which is only half of what you would get if you worked for them. In addition, Medtronic's PTO plan offers employees a generous 35 days of PTO after 24 years of service, when it hits its maximum accumulation. In contrast, Emerging Pharmaceuticals limits PTO to 10 years, after which employees are only eligible for 18 days of PTO. This means that even if you spend your whole career working for Emerging Pharmaceuticals, you would not accrue as much paid time off (PTO) as a brand-new Medtronic employee would on their first day. It is important to note that Emerging Pharmaceuticals' tuition reimbursement program is far more restrictive than Medtronic's. Furthermore, Medtronic provides a scholarship option, strengthening their commitment to educational support. It is clear from a comparison of the two companies that employees who decide to move to Medtronic would have access to a significantly higher degree of flexibility and a wider range of chances to create a path to future success. Also, compared to what Emerging Pharmaceuticals offers, they would start their career with twice as much Paid Time Off (PTO) and a more attractive first wage. Emerging Pharmaceuticals runs a risk of having continued issues keeping excellent employees if their benefits and compensation package aren't improved. We will analyze Emerging Pharmaceuticals in the following parts in order to improve and modernize the company's current comprehensive reward program. We will look at both quantitative and qualitative data in the present systems to find gaps so that we can push for improvement and offer instructional advice. Additionally, this information will be used to contrast and compare the current benefits and pay structure with outside benchmarking data from Emerging Pharmaceuticals' industry partner, Medtronic. 6

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