Total Rewards and Benefits (2024)

FAQs

How to explain total rewards to employees? ›

Total rewards can include everything from base salary and bonuses to health insurance and retirement savings plans. Total rewards can also include benefits such as paid vacation days and flexible work schedules.

The Importance of a Total Reward Statement

Through this holistic view, employees can evaluate their compensation beyond their paycheque and properly assess the full value of all the benefits and perks they receive at work. They also allow employees to properly track how their compensation changes from year to year.

So in addition to an individual's base salary or base pay, a total rewards package includes things like: Traditional benefits: healthcare, vision, and dental insurance. Voluntary benefits: disability insurance, employee assistance programs, financial counseling, or critical illness coverage.

It promotes and encourages employee engagement, which in turn improves organisational performance. Its aim is to give all employees a voice and choice on the total reward offerings, and enhance the psychological contract between employer and employee.

The components of total reward include; Compensation, Benefits, Wellbeing, Recognition, and Development. Compensation - This refers to base pay (base and variable) that employers provide to employees in exchange for skills applied, time given, targets met etc.

Our organization is committed to offering our employees a total rewards package that supports us as an employer of choice in our labor market. Our total rewards offering will be flexible and diverse to changing business and employment situations as well as to meet the diverse needs of our employees.

Employee retention – An effective total rewards strategy stimulates employee wellbeing, engagement, motivation, all of which are key for retaining employees. Competitiveness – A total rewards strategy makes organizations more competitive within their industry by incentivizing excellence in performance.

Benefits are a form of non-cash compensation, which your employer usually states in your contract. Benefits aren't linked to employee performance, unlike Rewards. Rewards are a motivational tool used to get the best from your employees. Benefits and rewards both have very different traits, but more on that later.

Benefits are sometimes included in compensation and other times considered part of the wider total rewards program. These include insurance packages and other value-added benefits such as discounts, assistance, and health-incentive programs.

How do you write a reward strategy? ›

The reward strategy should include: some guiding principles, what needs to be done in reward to reflect how the organisation is developing, details of the mix of financial and non-financial rewards to be offered, and a plan for implementation.

Under a total reward approach, all aspects of the work experience are recognised. And prominence is given not only to remuneration but also to non-financial rewards.

Reward management is the introduction of policies and strategies that rewards every employee within the business fairly and consistently across the board. Rewarding employees for outstanding work makes them feel valued and can prove to be a powerful motivational tool that boosts productivity.

Rewarding employees for good performance is vital to motivating and retaining talent. When employees are rewarded for their efforts, they are likely to become more loyal and productive.

Employee retention – An effective total rewards strategy stimulates employee wellbeing, engagement, motivation, all of which are key for retaining employees. Competitiveness – A total rewards strategy makes organizations more competitive within their industry by incentivizing excellence in performance.

Performance and productivity are essential metrics for evaluating your total rewards strategy. They gauge how effectively employees achieve goals and contribute to success. Measure using indicators like sales, revenue, customer satisfaction, etc. Link this data with rewards such as pay and bonuses.

A total rewards strategy is a system implemented by a business that provides monetary, beneficial and developmental rewards to employees who achieve specific business goals. The strategy combines compensation and benefits with personal growth opportunities inside a motivated work environment.

The concept of 'total reward' covers the tangible and intangible aspects of work that people value and may form part of a reward strategy. This factsheet examines how to create a reward strategy, covering the reasons behind it, how to implement it, and offering guidance on key principles.