PORT OF SEATTLE
MEMORANDUM
COMMISSION AGENDA – STAFF BRIEFING
Item No.
7d
Date of Meeting
June 28, 2011
DATE: June 21, 2011
TO: Tay Yoshitani, Chief Executive Officer
FROM: Tammy Woodard, Sr. Manager, Total Compensation
SUBJECT: Briefing – Total Rewards Philosophy
SYNOPSIS:
Total rewards encompasses what the Port offers to employees in exchange for their contributions to
the Port’s success. Articulating the Port’s total rewards philosophy and developing a model to
visually represent the varied elements of the total rewards package will be beneficial to the Port and
to Port employees. This work builds upon, and expands, the current total compensation focus to
include other elements of the package offered to employees, tangible and intangible, beyond pay
and traditional benefits. A Total Rewards Philosophy will provide a comprehensive and unified
framework for communicating the package to current and future employees, as well as a basis for
making future decisions about the programs that comprise the total rewards package.
INTRODUCTION:
Total rewards, at its broadest level, includes everything employees value that results from their
employee/employer relationship. Total rewards includes pay, health care, pension, learning and
development programs, availability of interesting work, the opportunity for public service, and
much more. Total rewards are a key element in attracting, retaining, and motivating employees to
contribute to their employer’s mission, goals, and business objectives. As organizations are unique,
each organization that articulates its Total Rewards Philosophy defines total rewards in a way that is
specific to that organization. Similarly, total rewards models are unique to each organization. Port
staff has begun the process of defining a Total Rewards Philosophy and creating a Total Rewards
Model for the Port. This philosophy and model will lead to various strategies that will guide Port
staff in managing the various programs that comprise the Port’s Total Rewards Program.
In past years, Port staff have had various discussions with Port Commissioners in public sessions
related to employee compensation and benefits, including last year’s discussions about payroll-
related costs during budget discussions, discussions about collective bargaining agreements, and
discussions related to salary and benefit resolutions. These discussions relate to the Port’s total
rewards package although an overall total rewards framework for these discussions has not been in
place. Going forward, a total rewards philosophy will guide strategic planning efforts around
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
June 21, 2011
Page 2 of 3
creating and sustaining a high performance workforce and will support broader strategic planning
efforts such as the Century Agenda.
ADVANTAGES OF A TOTAL REWARDS PHILOSOPHY:
Most organizations have a total rewards philosophy, even if it has not been purposefully developed
or communicated and is not consistently applied. A purposefully developed total rewards
philosophy that is broad enough to apply to all employee groups and flexible enough to guide
decisions through all economic conditions has multiple advantages. One major advantage of an
articulated Total Rewards Philosophy is a strategic and holistic method of attracting, retaining, and
motivating the employees the Port will need – now and in the future – to accomplish the
organization’s strategic goals. A Total Rewards Philosophy will also provide a consistent
framework for managing total rewards programs and making programmatic decisions. In addition,
a total rewards philosophy can lead to explicit principles for rewarding employees that will be
beneficial in many areas from audits, to managing pay and benefit programs, negotiating collective
bargaining agreements, and developing internal and external communications.
MODELING TOTAL REWARDS:
The programs that comprise total rewards packages vary from one organization to another as their
philosophies vary. The foundation of a total rewards model is often an organization’s mission,
business strategy, and people strategy. The ways employers choose to bundle and communicate
total rewards to their employees is also unique to each organization. A total rewards model visually
represents the elements of the total rewards package, the foundation for the package, and how the
package benefits the employees and organization.
The model the total rewards team is developing is based on the Port mission, values and culture,
business strategies, and people strategies. The model also has five categories: Pay, Benefits,
Learning and Development, Recognition, and Other. Current total rewards programs can be
grouped into these categories. The items that comprise the categories lead to employee attraction,
retention, and motivation, as well as employee engagement and performance, and attainment of
business results.
DEVELOPING A TOTAL REWARDS PHILOSOPHY:
A model of current total rewards is a part of the background and data gathering that the total
rewards team is undertaking. This data will be combined with information from Port leaders about
the work the Port will be performing into the future, and how reward programs will need to inspire
and engage employees to accomplish the Port’s future work. The total rewards team will use this
data to create a total rewards philosophy to review with Port leaders.
COMMISSION AGENDA
Tay Yoshitani, Chief Executive Officer
June 21, 2011
Page 3 of 3
NEXT STEPS:
Once the total rewards philosophy is developed, the team will assess the model of current total
rewards against the philosophy to identify areas where the current model does not align with the
philosophy. These gaps will be the basis for strategies to bring total rewards programs into
alignment with the philosophy. Depending on the outcome of the gap analysis, some total rewards
programs may need to be modified, some may not align with the philosophy and need to be
replaced, and others may need to be added.
Depending on the number and size of the gaps between the total rewards philosophy and the current
model, it will likely take three to five years to bring all total rewards programs into alignment with
Philosophy.
The total rewards team will provide future briefings to the Commission as this work progresses.
CONCLUSION:
Articulating and communicating a total rewards philosophy will provide a holistic framework for
updates, changes, additions, and potentially replacements to current total rewards offerings. With a
total rewards philosophy in place, related programs can be consistently managed while strategically
addressing appropriate variations. A total rewards philosophy will assist the Port in communicating
the entire total rewards package in a manner that leverages the breadth and value of the package as
well as the investment in the package, and the philosophy will help facilitate recruiting and
retaining the right people to perform the work necessary for the Port to achieve its mission.
OTHER DOCUMENTS ASSOCIATED WITH THIS BRIEFING:
PowerPoint presentation.
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS:
None.
