TOTAL REWARD GSK

Who is this man?

Lawlers model
Resources

Corporate goals and objectives

Organisation design and management style

Reward system

Individual and organisational behaviour

Environment

 Any Reward Strategy will express clearly the organisations intentions, and form the basis for communicating these intentions to employees

The TotalReward concept

GSK Total Reward Philosophy

Total Reward makes the GSK Spirit an everyday reality for our people
and is a major building block for achieving our mission. The principles have been developed to ensure that the interest of our employees is very closely aligned with that of GSK. Total Reward is a competitive package designed to attract, retain, motivate & develop the best talent. At the same time it is cost effective, benefiting GSK and the employee.

Total Reward Principles

Global principles, local country application Commitment to GSKs future Pay for performance Sharing success Value of whole package Beyond pay or benefits Alignment of employee and GSK interest

The Total Rewards Equation

Commitment and engagement drive employee performance and results; rewards for performance create job satisfaction
Commitment and Engagement causes Employee Performance which results in Employee Rewards which leads to Job Satisfaction

It goes wrong when:

- we ask about satisfaction with programmes & miss relationship between reward and performance

- we define reward too narrowly

- we get commitment to programmes without engagement

GSK Total Reward Pay Structures

External Equity
Pay levels

Internal Equity
Pay differences Equitable pay structures

Size & Frequency of Merit Pay

Performance rating

Factors affecting Salaries

Business Drivers

SALARIES
Internal & External factors
TotalReward Principles

Mechanisms for managing salaries

Market pricing Salary ranges
Other salary structure programmes

Salary review/performance review Department budgets

The deal at performance orientated companies:

Pay Emphasis on rewarding results, not tenure Segmentation of key employee groups Shift from fixed to variable pay Use of stock or stock options to reflect individual and company performance Differences in deals based on employee contribution Learning & Development Reliance on array of tools to help employees make most of their careers Use of full-circle feedback and comprehensive performance management Emphasis on development, especially among key employees and future leaders

Benefits Greater portability Fewer links to age and service Emphasis on nontraditional benefits Focus on shared responsibility Designed to reflect life stages and provide maximum flexibility Use of cost-effective delivery mechanisms
Work Environment Emphasis on committed leadership who articulate vision for success & plan to get there Consistent & regular communication about business & performance expectations Systematic measurement of culture and ongoing improvements Emphasis on line-of-sight involvement and rewards for performance Careful alignment of all people systems with company goals

TOTAL CASH

LIFESTYLE BENEFITS

SAVINGS CHOICES

Base salary

Variable bonus TOTAL CASH Shares Share Options Base salary LIFESTYLE BENEFITS Advice services Company Discount/Loans Post retiral medical benefits

Pay increase

Company car
Holiday Homes

Recognition

Healthcare

SAVINGS CHOICES Retirement fund

TotalReward Myth
is the same in every country is only for people with share options is a smiling face is base salary and bonus is a cafeteria system where employees can choose has been union negotiated

Truth
can include development is flexible supports the Spirit of GSK fits the GSK identity is a set of global principles includes total cash, savings and lifestyle benefits

TotalReward Myth
is the latest fad has all the elements of it designed centrally gives a benefits valuation will solve all hiring needs

Truth
is a brand is a framework is about employee retention values the whole package rewards success is an employee value proposition tailored to each country driven my market data

So TotalReward is..

A concept Global A set of principles A framework A brand

End