In this still-evolving labor market, in which employees are increasingly rethinking how they want their work life to look, it generally takes more than a nice paycheck to woo – and keep — the talent you seek. What you need is a total rewards plan, which must include opportunities for employee growth and advancement. With that said, here are elements of an effective total rewards package.
Explain Total Rewards
Essentially, this a combination of all the pay, benefits, and developmental rewards an organization provides to employees who meet specific goals.
Why Total Rewards?
The overarching goal is to ensure that all your people have the best combination of both monetary and non-monetary rewards to motivate them to perform in accordance with organizational goals and desires – and to stay with you.
Let’s take a deeper dive into the advantages of a total rewards approach:
- The ability to better recruit. Once you’ve crafted and assigned a value to your total rewards plan, you can dangle it in front of job candidates you seek to win over.
- Increased retention. When employees recognize that you’re in their corner and are willing to invest in them in more ways than pay, you’ll end up with a happier, more content workforce that is more engaged and will remain with the company.
- Increased productivity and performance. It’s well evidenced that carefully put together total rewards programs are linked to increased productivity and general satisfaction, which leads to satisfied customers and a bolstered bottom line.
- Increased total rewards awareness. Unfortunately, it’s common for many employees to underuse employee benefits, mostly because they either don’t know about them, or they’ve forgotten. Establishing a total rewards plan gives you an opportunity to apprise or remind your people of what’s available to them.
Note that many organizations are benefitting from a digital employee rewards approach that help them establish a valuable connection between not only their employees, but all the rewards, programs, and resources you provide. The leading HR consultant Mercer can help you put this in place at your company.
What’s in a Total Rewards Package?
Here are the basic elements of a fully integrated total rewards package:
- Pay. We don’t mean to imply that pay is no longer that important to recruitment and retention, because it is. It’s just not enough on its own. Compensation strategies can include fixed pay, which is the employee’s base compensation, and variable pay, such as commissions and bonuses. The latter is based on employee performance.
- Benefits. These are indirect, non-monetary payments that people get along with their money. Benefits can include, for example, retirement plans, health and life insurance, employee assistance programs, and benefits that are required by law, including family leave, unemployment benefits, and workers’ comp.
- Recognition. These programs are designed to reward performance and effort that promotes organizational success. We’re talking, for instance, peer recognition awards, service awards, and employee acknowledgment at events such as luncheons.
- Work-Life. These strategies seek to help your people gain a balance between work and home. They may include, for example, flex work, health and wellness programs, diversity programs, and paid and unpaid time off.
- Talent development. This means providing your employees with the tools and opportunities needed to enhance their skills and optimize their organizational potential. These could be in the form of promotions, tuition assistance, internships, online learning, leadership training, and mentoring and coaching programs.
- Performance management. This entails making sure employees know what’s expected in terms of performance. It also involves providing feedback and assessing, monitoring, rating, and rewarding performance.
The bottom line is that employees increasingly want to work for organizations that have all the elements of an effective employee total rewards package. This means a plan that promotes growth, both within the company and outside it. If you need help putting together a top-shelf plan, Mercer is ready to help.