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Assignment Two
HRMN 395 Total Rewards
Metrics for Evaluating the Effectiveness
of Total Rewards in an Organization
This Photo by Unknown Author is licensed under CC BY-SA-NC
This presentation was created by Joyce Henderson, Ed.D. to help clarity assignment
two and the important tool called metrics.
Memo to CFOs : Don’t Trust HR A seemingly curious statement from Dr. Richard
Beatty, Professor of Human Resources at Rutgers University to a conference of CFOs
in Florida. Among the controversial views he offers on HR, he cites that many of the
metrics HR professionals report do not show evidence of the correlation between
common metrics such as turnover, employee satisfaction, performance and financial
returns. He says for those employees who make a negative impact, organizations
would be better off paying them NOT to come to work or better still, paying them to
work for their competitors. Another metric such as being an ’employer of choice’ is
‘silly’ and is an invitation to those who want somewhere ‘to hide out’, rather than
those who ‘are excited, excited and understand how to contribute to what you do.’
HR taking on the ‘St. Bernard role’ by treating most employees the same way and
‘spending considerable time trying to defend or fix poor performers. He says that the
language of organizations is numbers and that HR isn’t very good at data
analytics. Beatty said. “They don’t think like business people. Many of them entered
human resources because they wanted to help people, which I’m all for, but I’m also
for building winning organizations.“ Dr. Beatty and I are hoping to equip our
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students to address these concerns. See the full article here:
http://www.cfo.com/human-capital-careers/2009/03/memo-to-cfos-dont-trust-hr/
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Deliverables for
Assignment Two
Design and share a
PowerPoint presentation that:
Describes and justifies three
metrics that evaluate the
effectiveness of the total
rewards for the organization
used in the first assignment
Provides a “script” in the
notes section articulating the
bullet points as if you are
making a presentation to the
class
This Photo by Unknown Author is licensed under CC BY-ND
Assignment two focuses on a crucial action that HR professionals must perform –
selecting and reporting on key metrics for their function which is to ensure the
organization has requisite competencies for organizational success. While the HR
team may report several metrics, in this assignment we focus on metrics that will
measure the effectiveness of the total rewards program.
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Metrics are a Core Element of the Total
Rewards Philosophy
Source for definition: UMUC Course Module 1 Commentary
We must evaluate the effectiveness of the total rewards package offered to employees. Total rewards
are one of the major expenses for organizations when we combine compensation, benefits, training
and other costs of the total rewards. The measurement criteria of the metrics should include two
elements which are: 1) do the rewards help the organization attract, hire, retain, and engage
employees and 2) are the rewards aligned to support the goals of the organization?
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Why measure?
Organizations measure what
matters for the success of their
organization. What gets measured,
gets managed.
With the right measurements in
place, an organization can gauge
the effectiveness of their Total
Rewards programs and make
changes, if necessary.
Metrics answer questions – so the
right questions need to be asked.
This Photo by Unknown Author is licensed under CC BY-NC-ND
Source: UMUC Course Module 5 Commentary
As was shared in the notes section of slide 2, we measure the effectiveness through
metrics of the total rewards package offered to employees because total rewards are
one of the major expenses for organizations when we combine compensation,
benefits, training and other costs of the total rewards. The measurement criteria of
the also, if we do not offer an effective total rewards package, we may not be able to
recruit, hire, retain, and engage employees which can mean failure of the
organization. Metrics should include two elements which answer the questions of : 1)
do the rewards help the organization attract, hire, retain, and engage employees and
2) are the rewards aligned to support the goals of the organization?
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The Language of Business is Numbers – Numbers that
Communicate Success or Failure of Initiatives
Sales are up by 10%
Market share has increased by 20%
Stock price is up by 2 points
Profits have eroded by 3%
Our brand has 50%
name recognition
Customer satisfaction has
Increased by 12 percentage
points
This Photo by Unknown Author is licensed under CC BY-SA
Non-profit organizations, government agencies, and the military also use numbers to
communicate their success or failure. For example, funding, donor participation,
clients served, and name recognition are typically tracked by non-profit organization.
And military readiness, recruits attracted, retention, funding, and more are reported
by the military branches. Government agencies at all levels also report metrics such
as their funding, budgets, key mission or goal accomplishments.
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HR Professionals Must Communicate in the
Language of the Business (Numbers) in Order to be
Credible, Heard, and Understood
Market comparison of compensation
shows our organization in the
upper 1/4th
Intent to leave due to the
rewards offered is down by
10%
Skills training of employees has
resulted in 100% availability of
requisite competencies for
expansion of production
Exit interviews report that 80%
of the employees leaving is due to
rewards offered and 20% is due to
negative culture of the organization
One again, we see that metrics for total rewards need to answer the questions of : 1)
do the rewards help the organization attract, hire, retain, and engage employees and
2) are the rewards aligned to support the goals of the organization?
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What is a Metric?
• Metrics, also known as measures or key
performance indicators, are tools that assess and
report the impact of a particular project or
activity.
• Metrics may be quantitative or numeric in nature
such as increased in retention because of rewards
by 20 percent. Metrics may also be qualitative
such as improved staff satisfaction levels with
rewards from 55% to 75%.
• Both quantitative and qualitative metrics are
typically reported in numbers such as percentages
or indexes.
• Metrics answer questions – such as – is the
organization meeting its goal to offer rewards that
attract, retain, and engage employees?
This Photo by
Unknown Author
is licensed under
CC BY-SA
Source for definition: UMUC Course Module 5 Commentary
When the term metric is mentioned, for some it seems to be a confusing term. The
term metric is nothing more than another word that means measurement of our
actions or initiatives. Many of us use metrics to track our own personal fitness or
health such as our Body Measurement Index (BMI) is a metric, as is our weight, our
blood pressure, our cholesterol level, our blood glucose level. These are metrics.
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Metrics Need to Matter to the Organization
• What Human Resources assesses and
reports to the organization should be
important to the organization or else it is
ignored or marginalizes the work of HR
• CEOs report that Human Resource
professionals do not share metrics that
matter. Instead they report useless ones.
• How do we determine if our metrics are
important? Ask, do they link or align with:
• Organizational capabilities
• Requisite employee competencies
• Challenges of the organization
• Strategic plan for the organization
• Recall that these 4 items were presented
in Presentation One
This Photo by Unknown Author is licensed under CC BY-SA
Some CEOs say that HR reports that others cannot relate to as important such
as turnover, employee satisfaction, costs of benefits. We need to share
metrics that are readily seen as ones that MATTER. They matter if they answer
the questions of : 1) do the rewards help the organization attract, hire, retain,
and engage employees and 2) are the rewards aligned to support the goals of
the organization which can be Organizational capabilities, Requisite employee
competencies, Challenges of the organization, or the Strategic plan for the
organization?
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Metrics are key performance
indications of the successful
achievement of goals
Metrics are important key performance
indications for organizational goals; they track
success related to financials, customers, and
business processes and can be used for Total
Rewards
Metrics need to measure the outcome in a
direct, not indirect manner
The direct linkage between rewards and
customer satisfaction, employee satisfaction,
revenue, profits, and productivity are hard to
prove
Sometimes HR teams make the mistake of reporting metrics that are good ones to
track but by themselves, they are not seen as a measurement of total rewards.
Turnover, for example, is important to track but the reason employees are leaving can
be related to something other than rewards. The employees, for example, may
merely be reaching the age for retirement. And, employee satisfaction is good to
know – who doesn’t want happy employees – but is that satisfaction due to the
rewards being offer or perhaps something else?
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What are the Right Questions Metrics
Should Ask About Total Rewards?
• Are we offering rewards that attract, retain,
and engage employees?
• Are we offering the right rewards?
• Are our rewards competitive?
• Are we communicating our rewards to the
employees effectively?
• Are our rewards such as training and
promotions preparing the organization for
tomorrow?
• Are our rewards retaining our key essential
employees?
• Do our rewards allow us to distinguish
between the top and lower performers?
• Is the cost of the rewards offered worth the
price?
• Are our rewards helping the organization
achieve it’s major objectives or
organizational capabilities?
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Evaluate the Metric – Does it Matter?
Does It Answer the Right Question?
The right metric will directly assess Total
Rewards (monetary, non-monetary, or the
work environment such as training, promoting,
or the work itself)
Total Reward Metric Example 1:
Percentage of employees who intend to leave
the organization because of rewards
Total Reward Metric Example 2:
Percentage of employees in key positions rating
rewards as satisfactory or above
Total Reward Metric Example 3:
Comparison of compensation for key positions
to the competition for same potential
applicants
The right metric will be linked to the
organizational capabilities, requisite
competencies, challenges, or strategic plan
If a core capability is to be mission ready, retention
of employees is critical
Employees must be retained and if the rewards are
not attractive, they may leave
With unemployment low and wages not increasing
significantly over the past 5 years, employees may
leave if they can receive higher compensation
elsewhere
Before you select your metrics for the second assignment, ask yourself, does the
metric directly assess Total Rewards (monetary, non-monetary, or the work
environment such as training, promoting, or the work itself)? Does the metric in
some way linked to the organizational capabilities, requisite competencies,
challenges, or strategic plan?
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Metrics Answer the General Question: Are our Rewards Effective for
Attracting, Retaining, and Engaging Employees with the Requisite
Competencies our Organization Requires?
This graphic found at https://www.helioshr.com/2015/07/compensation-vs-total-rewards-whats-the-difference-really/
This Photo by Unknown Author is licensed under CC BY
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Before finalizing your metrics, ask yourself if
each metric …
• Specifically measures total rewards and not another organizational outcome such as
customer satisfaction, revenue, or profit that is only indirectly related? Does it prove
that the rewards are worth the cost?
• Reports on a specific outcome related to total rewards rather than a broader, albeit
important, HR metric such as turnover, retention, time to hire, cost of benefits, or
employee satisfaction?
• Matters for achieving any of the following?
• Organizational capabilities
• Requisite employee competencies
• Challenges of the organization
• Strategic plan for the organization
• Can be calculated (does data exist that can be used for this metric)?
• Is void of incorrect terms such as using the term matrix rather than metric, metric
system rather than metrics, and incorrect grammar such as metrics is or metric are.
HR professional, as do all managers, when they use incorrect terms.
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This Photo by Unknown Author is licensed under CC BY-NC-ND
Have Questions about Assignment Two or the
Term/Tool of Metrics?
Please place the questions in the Questions Forum
so all will benefit.
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STARBUCKS METRICS
Tools Used to Measure the Success of its Total Rewards Program
HRM 395
Professor, April Hamlin
OUTLINE
1. Introduction & Purpose
2. Definition of Metric
3. Metrics Used to Evaluated its Total Rewards Program
4. 1st Metric: Recruitment
5. 2nd Metric: Retention
6. 3rd Metric: Production and Services
7. How Metric Data is Collected
8. Justification: Why these metrics?
9. Conclusion
10. References/Sources
Introduction:
Starbucks can use metrics to measure the success of their Total Rewards Program. Their
Total Rewards Program is a key component that drives their recruitment, retention, and
motivation of their workforce. Starbucks organizational leaders and executives must constantly
work with their human resource (HR) department to monitor their workforce’s productivity.
Much of that productive is directly correlated to the success of the Total Rewards Program,
which directly impacts Starbucks ability to be competitive, profitable, and successful. All must
be aligned with Starbucks business object and mission statement “to inspire and nurture the
human spirit-one person, once cup, and one neighborhood at a time.”, (Starbucks, 2016,
September 26).
Purpose:
This presentation provides you insight on what metrics Starbucks are or can utilize ensure
their Total Rewards Program are and must be aligned with their strategic plan and business
objectives. Starbucks continually uses metrics to evaluate the productivity and satisfaction of its
workforce and organization; ensuring they are both properly aligned. Additionally, this
presentation discusses three metrics used to gauge how well they are meeting the needs of their
organization, stakeholders (i.e. managers, employees), and shareholders (i.e. customers).
Finally, this presentation provides justification for these metrics and how they will help ensure
Starbucks continue to recruit, retain, and motivate its workforce, so they can maintain a
competitive edge both domestically and globally.
Definition of “Metric”

Starbucks must utilize effective measuring tools to monitor the health of its workforce.
According to humanresourcemetrics.org (2008), a metric is a tool used to compare and
contrast results against organizational objectives. Basically, metrics provide qualitative and
quantitative data that helps identify how successful and productive an organization and its
workforce are. Starbucks human resource (HR) must offer these tools (metrics) to help
assess how efficiently and effectively the metrics are being monitored and how they add
values to organization strategic achievement and success (Cardenas, 2016). Because many
HR departments are considered strategic partners for their respective organizations,
Starbucks must utilized its HR professionals incentive base programs to measure the
success of its programs designed to recruit, retain, motivate its workforce. The metrics
Starbuck utilizes to monitor the progress and validity to its Total Rewards Program can
help ensure Starbucks remain competitive, successful, and profitable.
Sources:
Humanresourcemetric.org, (2008). What is a metric? Retrieved from http://www.humanresourcemetrics.org/whats_a_metric.html
Cardenas, H. (2016). HR metrics and their impact on business. Chron. Houston, TX. Retrieved from http://smallbusiness.chron.com/hr-metrics-impact-business–2267.html
Metrics Used to Evaluated Total Rewards Success
METRIC 1: RECRUITMENT
METRICT 2: TURNOVER REDUCTION (RETENTION)
METRIC 3: PRODUCTIVITY (PRODUCTION) AND SERVICES
1st Metric: Recruiting
In this slide:

Metric: Track Recruitment

Recruiting new employees, especially those with established customer service
requisites knowledge, skills, and abilities (KSA) are important, because they are likely
to initially perform optimally for Starbucks organization. The goal would be in
encourage employees to want to work for Starbucks company by offering Total
Rewards Programs by offers incentives and rewards that encourage people to want to be
a part of their workforce.

An example would be to see how many employees are recruited based on Total
Rewards Programs incentives versus just those looking to get hired for a job based on
salary

I would recommend a automated survey/questionnaire be conducted at either the preapplication, application, interview, or post-interview process/phase.

A goal would be to look for what Total Rewards Programs are Starbucks offered that
encourage candidates to choose them over other competitors.
2InndthisMetric:
Reducing
Turnover
slide:

Metric: Turnover (Reduction) Ratio

Turnover is when employees leave the organization. Turnover can happen for any
reason. Starbucks must utilized current and reliable data to gauge how much turnover
has happened (over a measured time period) and in what positions are turnover
happening. Utilizing the data from this metric can helps identify and point directly to
the success of the Starbucks’s Total Rewards Program.

Starbucks has been one of the best companies in the fast food industry at keeping its
turnover low. According to Mark Ford (2016), Starbucks’s “Bean Stock” program
which awarded 14% stock options to each employee (full-time or part-time).
Additionally, a comprehensive health plan was another Total Rewards Program benefits
that aided in the company’s low turnover rates.

To continue tracking this metric, Starbucks would need to offer this Total Rewards perk
to selected workers (as an earned incentive).

I would recommend they monitor for 2-3 years, and see if the turnover rate continue to
stay low. If the turnover rate rises, the metrics would have to show how much turnover
happened before and after the perk was offered.
Source: Ford, M., M. (2016). A Starbucks secret: how to keep good employees. Early to rise: wealth. Denver, CO. Retrieved from http://www.earlytorise.com/atarbucks-secret-how-to-keep-good-employees/
3rd Metric: Increased Production and Services
In this slide:

Metric: Track Increased Productivity and Services

Tracking productivity is important for Starbucks, because increased production in quality products and services increases
it market share and revenue stream. According to Ycharts (2013), Starbuck employee-intensive workforce is crucial to its
success. In 2012, it started it “Perks for Partners” Total Rewards program initiative.

This research shows that by implementing it Total Rewards Program in 2012, and then modifying throughout the years,
Starbucks has continue to make substantial gains that support it business objectives and strategy, while ensuring is
workforce continues to provide quality products and services.

A benchmark that I would set for Starbucks would be to look to increase revenue by 10% over the next 5-10 years, while
reducing the cost of unnecessary programs. By increasing productivity through the retaining experienced employees,
revenue and profits will continue to increase. These employees are likely to have the necessary KSAs need to continue
and increase Starbucks’s over business objectives. This will allow more resources to be targeted toward more incentives
programs that will encourage more employees to stay and continue to be productive
Source: Bailey, J. (2013). Starbucks productivity: revenue per employee. Retrieved from https://ycharts.com/analysis/story/starbucks_
productivity_metric_revenue_per_employee
Justifications: Why these metrics?
Why do these metrics matter?

Theses metrics must be linked and aligned to Starbucks business objectives in order to ensure their
continue success (UMUC, 2016). By ensuring recruiting cost and turnover cost remain low, more
emphasis resources can be directed to their Total Rewards Program which allows their employees to
be more productive and provide quality services to their customers. All enable Starbucks to remain
competitive and ensure they continue to recruit, retain, and motivate a more talented and dedicated
workforce.

Customers demand consistent and improved services and products, so Starbucks must ensure its
metrics help identify the capabilities of its workforce. With increasing competition from domestic and
foreign industry rivals, each metric must identity the level of KSAs gained and lost with each
recruitment or turnover. This is important because it highlights how Starbucks’s workforce can sustain
or recover and maintain its competitive edge.

The challenges Starbucks face is being able to actively monitor and measure the each metric and
utilize them in a timely manner. Much of its success if based on its ability to provide continued
quality service and products in a timely manner. Because recruitment and retention in services
business is so rapid, successfully using the metrics to collect data and being able to implement needed
changes may prove to be difficult for their organization leadership and human resource professionals.
Source: UMUC, (2016). Topic 3: Implementing the Total Rewards Philosophy. Adelphia, MD. Retrieved from https://learn.umuc.edu/d2l/le/content/168770/
MD. viewContent/7320429/View
Conclusion
In summary, Starbucks metrics to measure the success of their Total Rewards Program
to ensure it continues to encourage and drive recruitment, retention (reduction in turnover),
and motivation (increase productivity in products and services) from its workforce. Much
of Starbucks success can be attributed to its modernized, unique, and quality Total
Rewards Program. This has directly impacted Starbucks’s ability to be competitive,
profitable, and successful.
This presentation discussed metrics Starbucks can start or continue utilizing to measure
how effective its Total Rewards Program is, and whether it is properly aligned with this
business objectives and business strategy. Additionally, this presentation discussed three
metrics that gauge how well they are meeting the needs of all those vested in the success of
the organization. Finally, this presentation provided justification for the use of the metrics.
Starbucks must continue to monitor its Total Rewards Program by analyzing and
successfully utilizing the metric data directly linked to its Total Rewards Program. By
doing this, I truly believe Starbucks will continue to meet their overall goals and vision, “to
inspire and nurture the human spirit-one person, once cup, and one neighborhood at a
time.”, (Starbucks, 2016, September 26).
Reference/Sources

Bailey, J. (2013). Starbucks productivity: revenue per employee. Ycharts. Wall
Street Journal. Retrieved from https://ycharts.com/analysis/story/starbucks_productivity_metric_
revenue_per_employee

Cardenas, H. (2016). HR metrics and their impact on business. Chron.
Houston, TX. Retrieved from http://smallbusiness.chron.com/hrmetrics-impact-business–2267.html

Ford, M., M. (2016) A Starbucks secret: how to keep good employees. Early to rise: wealth. Denver, CO.
Retrieved from http://www.earlytorise.com/a-starbucks-secret-how-to-keep-good-employees/

Humanresourcemetric.org, (2008). What is a metric? Retrieved from
http://www.humanresourcemetrics.org/whats_a_metric.html

Starbucks, (2013). Business objectives. Seattle, WA: Retrieved from
http://starbuckscompanynews.blogspot.kr/2013/09/business-objectives_1234.html

UMUC, (2016). Topic 3: Implementing the Total Rewards Philosophy. Adelphia,
MD. Retrieved from https://learn.umuc.edu/d2l/le/content/168770/
viewContent/7320429/View

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