Total rewards: What you need to know
Memory Nguwi
MANY organisations have turned to total rewards management to provide a more holistic approach to employee benefits and rewards in today's modern world. Total rewards refer to the combination of all the benefits and rewards that an organisation provides to employees, such as salary and bonuses and programmes and perks such as retirement packages, health insurance, and tuition reimbursement. It also refers to the process of managing and providing these rewards and benefits.
Total rewards model is a framework for managing human capital that focuses on providing a complete employee experience — one that includes financial rewards, such as salary and bonuses; experiential rewards, such as opportunities for professional development and career advancement; and social rewards, such as opportunities for collaboration and team building.
e total rewards model is based on the idea that employees ultimately care more about their total experience with a company than their compensation alone.
e total rewards model is broad and deep; it encompasses everything a company does to support and advance the careers of its employees. It is a framework for human capital management that uses the employee experience lens to help companies assess their current state, set strategic priorities, and design and implement actions for continuous improvement.
e total rewards model is used to build a comprehensive strategy that focuses on the "how" of an organisation, the strategy, policies, and programs that are designed to support the organisation's strategic goals, values, and culture.
e total rewards model is the bridge between strategy and human capital management. It is designed to help organisations design the programs and policies needed to attract, develop, and retain a talented workforce.
e total rewards model uses a holistic approach to consider all the factors that make employees feel valued and fulfilled in their jobs. e total rewards model emphasises the importance of finding the right balance between work, purpose, and culture for a more fulfilled workforce.
The total reward strategy
e total rewards strategy is an organisation's plan for the best way to use its total rewards to achieve its business goals.
e total rewards strategy is built on the foundation of the total rewards model, which provides a comprehensive framework for thinking about the connection between strategy and human capital management.
It's also important to remember that a total rewards strategy is a living document, meaning it will change and evolve as your organisation grows and changes. Just as the total rewards model is a framework rather than a set of hard — and— fast rules, the total rewards strategy serves as a guide for making decisions, not rules that must be followed.
is allows leaders to adapt the total rewards strategy to their unique situation, ensuring that their organisation's total rewards programs are aligned with their business goals.
e first part of a total rewards strategy is assessing your current state. is includes an assessment of where your organisation is today regarding your total rewards programs and your ability to execute those programs. It also includes a clear articulation of where you want to go.
For example, suppose you want to build a reputation as an organisation that promotes from within.
In that case, your strategy may include a series of actions such as investing in learning and development programs for employees, creating a career development path, and providing opportunities for employees to take on bigger and more complex roles.
Key factors
According to a survey conducted by Watson Wyatt and WorldatWork, the following important measures should be taken by companies when developing their total rewards strategy.
•Alignment
– e total reward strategy must align with the full human capital value chain. e study found that organisations with high levels of employee performance are more successful than companies with low levels at aligning employee behaviour with the company's aims.
Consider what employees want - Rewards only work if they're valuable to employees. Too many firms don't know if employees value their rewards plans.
ey do not check if the rewards help attract, motivate and retain employees. More organisations should consult employees about their rewards preferences and utilise the feedback to shape reward programs.