Total Rewards Programs and Statements

Total rewards refer to all compensation, bonuses, and benefits for an employee. The main part is the salary, also known as the direct benefits. There is also the indirect part of compensation. This refers to benefits, rewards, and any other “extras.”

Here are the main total rewards:

• Compensation: This is the salary along with any bonuses. It is the financial part of the total rewards.
• Education: Examples are courses or paid subscriptions to learning portals. It covers conferences and events that build up work skills.
• Performance: Examples are promotions and career possibilities.
• Lifestyle: Gym memberships and employee discounts. Paid lunches in the office.
• Work style: Examples include flexible work, money towards a home office, and remote work options.

There are also benefits, which we will cover separately.

Employee benefit plans

These are a crucial part of a total rewards strategy. While the expense can be high, so is the value for employees.

Health insurance: This is one of the most popular benefits companies offer. It often includes medical, dental and vision.

Life insurance: Offered if an employee dies while working for an organization.

Disability insurance: Given if an employee suffers a disability while working for an organization. It can last any period. It gives the employee the peace of mind that if something happens, they can still cover significant expenses.

Paid time off: This varies by organization and its individual needs. It often increases depending on the number of years spent in the company.

Retirement plan: Examples are a pension plan or profit sharing. Organizations often choose to match employee contributions.

Benefits matter for multiple reasons. Firstly, they solve the issues that can affect the workflow of employees. Pensions solve fears about future security. Medical insurance solves fear of what will happen if an employee gets sick.

Not giving these benefits can mean lower productivity and weaker company morale. They are often the deciding factor for attracting better talent.

Why have a total rewards strategy?

Total rewards are crucial for the workforce. Firstly, they motivate employees. They also function as an opportunity to make compensation personal. This leads to a higher level of dedication and loyalty. That in turn means better retention.

Comprehensive total rewards are also attractive for potential employees. Relevant, tailored compensation helps attract the best talent.

How to make a total rewards strategy successful

When creating a strategy, focus on these key points.

1. Put the employee first. Keep the rewards relevant to the employee. What do they need right now? What is a necessity? What is a luxury? Get feedback to be sure you are providing the best benefits for your investment.
2. It is extremely helpful to find out what is happening in the broader market. This tells you which are the most effective rewards. Benchmarking also helps you to potentially find underserved areas of rewards, boosting your compensation ahead of the competition.
3. Regularly evaluate. What may be a low expense high impact benefit now could change. It may become expensive or redundant for the workforce. This would lead to the worst-case scenario: budget spent on unwanted, unused benefits.

Extra considerations for what could make a good benefit are as follows. Firstly, flexibility around where to work through remote policies. This helps improve the work-life balance of employees. From this, productivity improves.

Another possibility is to offer services and support around mental health. This could take a broad variety of forms. From yoga sessions to therapy app subscriptions.

Education is a common possibility for employees. There are ways in which this could manifest, being a benefit with innumerable possibilities. You may be able to offer education that specifically matches your organizational aims. For example, education and workshops about the implementation and possibilities of AI. This could help both employer and employee.

Customization of benefits is another option for employees when approaching compensation. This helps to create a sense of ownership of compensation among the workforce, improving morale.

Surveying employees

A critical part of a good benefits plan comes from surveying employees. The questions need to be specific. It is important to consider how questions of a certain type will lead to a certain answer. For example, whether the question is open or closed. Or, if it has bias towards a certain response.

It is also necessary to evaluate how broad your questioning will be. There may be a focus on new rewards when overhauling a total rewards plan. In other circumstances, there could be a focus on just one type, like lifestyle or education related benefits.

Make the questions personal to keep the process as relevant and human as possible. Also, allow users to give their feedback anonymously. This will get more precise data. Offer incentives for those that fill out the survey.

There are clear benefits for employers to do this work. The right benefits will have an impact that surpasses their financial value. This not only saves expenses but improves workforce morale.

After surveying, make sure to communicate your findings. By including your employees in the process, you help give them ownership of the benefits, improving workforce cohesion. Keep the dialogue ongoing so that the total rewards are continually improving.

Provide clear, regular opportunities for employees to give feedback. Provide resources, when possible, to flesh out your benefits. Extra information, or advice on how to get the most out of them. It may be right to have companywide communications. This is relevant for situations where a sizable part of the workforce wants updates on a much-awaited benefit. Access to a recorded event, for example.

Conclusion

Total rewards highlight the complete investment by a company in its workforce. The key throughout the total awards creation process is to create compensation that recognizes the value of employees. It should be as personalized and as relevant to the employee as possible. Once done, the employee will feel inspired, satisfied, and effective.