A Review of the Components Within a Total Rewards Package
Have you thought about what it is that specifically keeps your employees loyal to your organization? Do you believe there are steps you, as the decision maker of an organization, can take to offer your team members incentives that will excite and retain them over the years? If you are an enlightened leader, you may have worked to implement a robust total rewards package intentionally.
Employees want to join an organization not only for the great experiences they will receive in their work, but they are also interested in the perks that will help them grow outside of the workplace. Total Rewards is a concept that describes all the tools available to an employer that may be used to attract, motivate and retain employees. To an employee or candidate for employment, the notion of total rewards includes perceived value as a result of the employment relationship.
It is a continuing trend to hear of employers coming up with creative ways to attract and retain high performers and valued team members. The strategy of offering total rewards has advanced considerably and is leveraged as a way to attract, motivate and retain talent.
What is Included in a Total Rewards Package?
The package typically contains elements of compensation, benefits, work-life benefits, performance recognition and career pathing opportunities. Following are general suggestions of what can be considered when putting together a total rewards package:
1. COMPENSATION: In general, most employees regardless of title or role within the organization have an expectation regarding their compensation. There are a range of pay strategies that provide incentives and encourage retention. Following are ideas of pay that can be distributed in ongoing, short and long-term increments.
- Fixed pay — Generally, this is the base pay offered to an employee. It usually is determined by the organization’s pay philosophy and structure and should be competitive based on the economy and other organizations with similar positions.
- Variable pay — This is pay that varies and changes in accordance with the level of performance or results achieved. This is one-time payment such as a bonus, which must be re-established and re-earned each performance period.
- Short-term incentive pay — This is another form of variable pay. It is implemented as a way to focus and reward performance over a period of one-year or less.
- Long-term incentive pay — A form of variable pay, long-term incentive pay is designed to focus and reward performance over a period longer than one year. Typical forms include stock options, restricted stock, performance shares, performance units and cash.
2. BENEFITS: Health and dental insurance are what come to mind when discussing employee benefits. There are also value-added benefits that can be offered within the insurance plans. Employee assistance programs, discounts on fitness programs and health incentive programs are also ways to expand the offerings to employees.
- Health and welfare plans that include health insurance, pre-tax benefits plans, life insurance and disability plans.
- Pay for Time Not Worked
- Retirement options both employee and company contributed
- Legally required and mandated provisions such as FMLA, workers’ comp, unemployment benefits to name a few.
3. WORK-LIFE BENEFITS: Leaders continually recognize the need for employees to have opportunities to enjoy their personal time off. Incorporating social activities within the work day provides the feeling of downtime, while still on the clock.
- Creating workplace flexibility such as working from home
- Paid and unpaid time off
- Health and wellness initiatives
- Community awareness and involvement programs
- Caring for children and dependent adults
- Culture diversity programs
4. PERFORMANCE AND SERVICE RECOGNITION: There was a time when employees worked their entire career for one employer. Although those days are long gone, companies are still seeking ways to recognize performance and loyalty to the organization.
- Service awards
- Retirement awards
- Peer recognition awards
- Spot awards
- Managerial recognition programs
- Organization-wide recognition programs
- Exceeding performance awards
- Employee of the month/year awards
- Appreciation luncheons, outings, formal events
- Goal-specific awards (quality, cost-savings, productivity, safety)
- Employee suggestion programs
- Weekly manager and direct report meetings
- Performance evaluations
5. CAREER DEVELOPMENT: These are opportunities for an employer to grow individuals while they are with an organization. The employees will also recognize that these skills can be used to propel them to new levels in their career.
- International assignments
- Internal promotions or transfers
- Succession planning programs
- Tuition reimbursement
- Corporate universities and mentoring programs
- Seminars workshops and conferences
- On-line learning and webinars
- Self-development courses
- Leadership training
At Helios HR, we believe organizations should be intentional in offering a total rewards program to their valued employees. When individuals of an organization feel supported by their employer, it becomes a win/win relationship. The business investment translates into a longer relationship. The monetary, as well as the non-monetary benefits, are designed to encourage growth in both personal and professional endeavors.
Visit the following links for more ideas and suggestions on implementing a total rewards program in your organization: