Latest Industry Report On Employee Engagement Strategies For 2021
Download Now
+

A Comprehensive Guide To Total Rewards (And How to Master It)


This hands-on guide on Total Rewards will unveil the core fundamental areas and give a solid foundation for your Total Rewards strategy. In this article, you will learn:

  • What are your employees looking for through their Total Rewards Strategy.
  • How to approach a Total Rewards Strategy that ensures benefits for both employees and employers.
  • How to manage all aspects of employee compensation, reward, and recognition.
  • Latest trends to keep you ahead of the game.
  • Resources that will provide you more context and further reading.
total-rewards

The HR profession is riddled with acronyms, buzzwords, and phrases that make little sense to anyone who is new in the field.

Total Rewards is a term often thrown around in the HR world, but not everyone is familiar with what it entails and how it can benefit an organization.

By the end of this guide, you will have a completely new outlook and approach to total rewards.

Let’s begin!

Chapter 1: Introduction to Total Rewards

introduction-to-total-rewards

What are Total Rewards in HRM?

Total-rewards-in-HRM

"Total rewards" is a broad term for an organization's total employee-related costs. It includes the money paid to employees in wages, salaries, bonuses, perks, and other intangible benefits.

In short, total rewards are defined as "the sum of all rewards provided by a company to its employees."

Rewards as a concept, no matter how broad or narrow you define them, has been the subject of study for many years. The idea of rewarding a human being for a specific behavior or an act is not new. Every time a person is rewarded, some change is expected and desired.

As an employer, you probably put a lot of effort into analyzing your workforce and the performance of your employees. Total rewards encompass all the ways that employees are rewarded for their work.

Dale-Carnegie-total-rewards

What is a Total Rewards Program?

A Total Rewards Program is an innovative approach to managing an organization's culture that offers a comprehensive set of rewards and benefits to its employees. When an organization adopts a Total Rewards Program, it unifies all of its benefits under one umbrella. In doing so, the organization gets acknowledged as a premier employer in the marketplace, with a higher propensity to attract and retain quality talent.

A total rewards program gives employees a complete package of benefits, rewards, and incentives. They are designed to appeal to employees and keep them at your company. To keep them with the hope that it will improve employee retention and job performance.

Now, as you know what total rewards are, let's look at the types of rewards classified in HR.

The Types of Rewards

Types-of-total-rewards

Here are the four major types of rewards classified in the realm of HR.

1. Extrinsic Reward

Let's say you work in a cafe, and you get a free coffee for being an employee. This is an example of extrinsic reward.

Extrinsic rewards are tangible rewards. Companies reward their employees with extrinsic rewards to acknowledge and encourage the employees' achievements. The most common extrinsic rewards are money and gifts.

Examples of extrinsic rewards include pay, bonuses, incentives, and gift cards. These rewards can be given to employees for a job well done or encourage them to continue working.

Companies use extrinsic rewards to increase employee productivity. However, research has shown that this type of motivation is not sustainable. This is why we need other forms of compensation.

2. Intrinsic rewards:

Intrinsic reward is the type of reward that comes from the work itself. For example, artists may find an intrinsic reward in making art – the act of creative expression itself.

Intrinsic rewards are the kind of rewards that we work for, the true motivation behind why we do the things we do.

Monetary rewards aren't always the best way to motivate employees. Sometimes the best way to reward your employees is by giving them praise and recognition.

They're not tangible rewards like bonuses or pay rises. Intrinsic rewards are intangible such as feedback, praise, and public recognition.

3. Monetary Rewards:

Monetary rewards are a great way to recognize employees' efforts and help motivate them to continue doing good work.

Studies have shown that money motivates more than just about anything. Suppose your employees know that getting a bonus is contingent on good performance or meeting specific goals. In that case, they're more likely to work harder to get that bonus.

For example, you can offer a bonus if an employee has the highest sales numbers or helps bring in new business. They're also helpful in retaining talent because employees want to stay at a company that rewards them monetarily for their work.

4. Non-monetary Rewards:

As the name suggests, non-monetary rewards are when the employee does not receive the money directly. An example of this is to send employees a gift card to their favorite coffee shop or restaurant.

When it comes to employee rewards, it's essential to think about your employees' needs. Monetary rewards are great for motivating employees, but they aren't great for driving personal growth. Many companies tend to give employees things they don't want or need, like a new phone, a laptop, or company merchandise.

Some non-monetary rewards include opportunities to learn and grow, extra time off, profit-sharing plans, wellness memberships, etc.

Also Read: Top 9 Non-monetary Incentives To Motivate And Retain Your Employees

Components/Elements of Total Rewards

Components-of-total-rewards

A Total Rewards package primarily has the below five components.

1. Compensation

In a total rewards system, compensation comprises base salary and extra benefits that come under variable pay. Variable pay rewards performance and recognition within the company, which motivates employees to perform better.

Variable pay can be short-term or long-term.

Short-term variable pay is a form of compensation that is disbursed to employees who achieve short-term improvements in productivity. It is offered for a predetermined period, typically less than a year.

Long-term variable pay is cash bonuses and stock options granted to employees who perform exceptionally for more than one year. It's a guaranteed strategy that boosts profits, employee retention, and employee satisfaction.

2. Benefits

The total rewards program should incorporate a comprehensive benefits package beyond the minimums mandated by the federal government.

When a business offers benefits to its employees, you must keep in mind that federal and state laws do not legally require the benefits. For example, health insurance is not a mandated requirement, but it is widely provided to benefit employees.

These benefits include paid vacation and bereavement leave, paid sick days, insurance against job loss due to illness and disability. Also, there is an array of other benefits designed to keep employee happy and productive.

These benefits go beyond the legal minimums and can be invaluable when attracting top-notch employees.

3. Professional Development

If you want to cultivate loyalty in your employees, don't just give them a paycheck. Provide a professional development program that gives them a chance for continuous learning and develop their skills.

professional-development-is-an-integral-part-of-workplace-culture
Source: Clear Company

It can be anything from tuition to career training or mentoring. It also encompasses benefits such as additional paid time off, office equipment purchases, and technology training.

Professional development can start with a company-wide seminar or specific to an area, such as technology updates or customer service. In the age of digital learning, people need to learn new skills, and companies need to help them do so.

4. Performance Recognition

Recognition goes far beyond free schwag and surprises. It comes in many forms, such as individual awards for outstanding work to formal recognition programs, such as employee award titles.

A recognition program should be comprehensive and awarded across all disciplines, including promotion, team members, and projects.

A system of recognition awards that includes peer recognition and team recognition is a simple yet effective approach to morale management.

5. Work-life Balance

Work-life balance is a term that describes how well employers are allowing their employees to balance their personal obligations with work responsibilities. For example, employers might allow flexible scheduling, so employees can pick up their children from school or attend special events.

Some employers allow employees to come in early or leave late and use this time for personal obligations. Others provide child care assistance, stress management, or even a gym membership.

To maintain a work-life balance, you must create an atmosphere that recognizes your staff's needs. By doing so, you elevate employee morale and reduce absenteeism.

Recommended Read: 15 Types Of Employee Benefits That Won't Break The Bank

Characteristics of A Total Rewards Program

Characteristics-of-total-rewards

Reward systems are accurately aligned to employees' performance and what they value. It can be tangible and intangible rewards, which will ensure they feel like they're being rewarded for their hard work.

So, let us look at the characteristics of an ideal total rewards system.

1. Relevance

Companies must tailor rewards to each individual's needs and are far more effective if they have a personal element. A great way to do that is to focus on what employees value.

Your employees deserve a reward system based on their needs rather than what you think is best for them.

Reward systems need to reflect the needs and desires of workers, or else they will become unsustainable. Start by recognizing what people want from work. Only after this can you form a successful total reward policy.

2. Fairness

One of the most basic principles of rewarding employees is "equity." This principle says that rewards should be perceived as equitable and fair.

Meaningful rewards create a sense of trust amongst workers. It's essential to make sure that the benefits you grant employees are fair and impartial. You want your employees to feel like they're getting a fair deal.

For rewards to be equitable, they must be perceived as relatively equal. It must be comparable between the organization's employees or to what people get for the same job in another organization.

3. Perceptibility

For rewards to be effective, they must be visible and seen by the employees. A visible reward helps employees to feel that their hard work is appreciated. It also provides a sense of personal reward, which will encourage them to improve their performances.

The more visible the rewards, the better!

4. Flexibility

Rewards should be flexible and varied overtime to meet employees' changing needs, lifestyles, and career stages. The best rewards are different for every individual, so they need to be flexible. Constant rewards may fade away with time.

Flexible rewards allow employers to respond to the changes in the business environment and adjust the mix of rewards on an ongoing basis. Flexible rewards change along with changes in performance at work.

5. Low-cost

To avoid monetary gifts as rewards, organizations should consider the costs and benefits of rewards. Rewards don't need to be costly for an organization to maintain effectiveness.

When choosing a reward, corporations must take into account its cost and the return on investment. They should be assessed carefully to determine their value.

It is also essential to keep in mind that rewards serve as a motivator for employees and positive reinforcements. The organization should keep rewards affordable but not so cheap that it is detrimental to employee motivation, productivity, and overall performance.

Chapter 2: Significance of Total Rewards

Significance-of-Total-Rewards

Advantages of Having a Total Rewards Program

Let's look at the key importance of having a Total Rewards Program in organizations.

1. Recruitment Magnet

Total rewards programs are designed to accomplish two things: to attract the right people and motivate them to do their jobs efficiently. It provides a holistic approach to recruiting, retaining, and engaging talent while focusing on the individual needs of each employee.

Once you have set up your total rewards packages, you can use them as a way to demonstrate the value of your benefits package to prospective candidates.

2. Employee Retention

Good benefits are critical to employee retention and performance. As the saying goes, you get what you pay for. It shows employees that their employers value them, are cared for and secure their jobs.

A salary increase is necessary but not sufficient to recruit and retain talented employees. Companies must also invest in employee training, on-the-job coaching, and higher compensation to retain the best employees.

When employees know what their employer invests in them, more than a paycheck, it can be an incredibly positive experience that leads to higher levels of morale and employee engagement.

People want to know they matter, and they want to be treated as people. That’s the new talent contract.
~ Pamela Stroko

3. Employee Productivity

A highly engaged workforce is a happy workforce. Compensation must reflect the actual value of employees' work — not just what they're paid in their paycheck each month. It should also reward intelligent, motivated, and hard-working employees. That way, companies can help them become even more productive and efficient at their jobs.

A successful total rewards program builds loyalty and makes workers better at their jobs.

4. Centralized Administration

Total rewards programs are meant to simplify employee benefits, compensation, and training. They provide the advantage of a centrally administered system that companies can use to monitor all aspects of employee involvement.

In other compensation systems, the amount of money an employee receives is based only on their position and work. It does not focus on training, development, or performance evaluations that may have occurred in the meantime.

All these things happen simultaneously to ensure employees are continually learning and improving their skills in the total rewards method.

Role of Total Rewards in Employee Engagement

total-rewards-in-employee-engagement

It's true; money can't buy you love. Neither can it buy you an engaged workforce.

A Gallup poll of 10,000 adults across the U.S. found that 6 in 10 workers were "actively disengaged" (43%). An employee engagement program is a piece of the puzzle for employers looking to develop and sustain their workforces.

In today's competitive market, employers have realized that it isn't just about rewarding good performance or motivating employees. It is also about making sure employees understand how their efforts impact the operation of their organization.

Here are some of the critical roles that total rewards play in creating an atmosphere where your employees feel valued, motivated, and inspired.

Money Isn't Everything, But Everything Needs Money.

Although studies show that non-monetary rewards and recognition are much more effective motivators than monetary compensation, money is still an effective motivator.

According to an HBR survey, 71,000 employees were polled around the world. Two-thirds of the people believe they are underpaid for their work.

When people are paid well, they work harder and produce better results. If employees feel they are significantly underpaid or overworked, their motivation to perform well deteriorates.

As a result, when considering the impact of rewards on employee engagement, businesses should consider the total rewards package. It will include both tangible and intangible features.

If you don't create a great, rewarding place for people to work, they won't do great work.
~ Ari Weinzweig

Engagement Exchange

Organizations must maintain a balance between what employees give them and what they receive to keep motivating employees to do more.

If companies want employees to perform their best, then they must value employees. They must recognize their extra efforts and create an environment where employees can get back what they need over time.

Your employees need to know how your company helps them in the areas they care about most. Provide an employee benefits summary that details their options for benefits and rewards.

By doing this, employees will get a real sense of what they are getting from the firm. It shows what they are getting in health insurance, retirement, and even paid time off.

An engaged workforce has a greater understanding of the business. And it is more dedicated and productive in its daily tasks.

A successful total rewards program builds loyalty and makes workers better at their jobs.

Listen to this podcast by Charu Purohit where she talks about how to provide an ideal combination of rewards in order to maximise the return on talent investment.

Impact of Total Rewards in Times of Covid-19

In the aftermath of the pandemic, companies must reconsider how their employee benefits are structured and their impact on the workforce's well-being.

The Covid-19 pandemic has impacted every aspect of our lives: physical, mental, financial. In addition to the financial strain workers experience, employers must also consider the employee's overall health and well-being.

Employers must reassess their total rewards strategy and align them with the current employment market to ensure work-life balance and employee productivity.

According to Gartner, 68% of employers have added or increased at least one reward to help employees during Covid-19.

The pandemic has fundamentally changed the way some companies approach their work and compensation. When setting salaries and total rewards, here are some of the factors that you must consider:

1. Expense Reimbursement

You can reimburse the expenses that are essential to your employee's remote working environment. This could include reimbursement of cell phone top-ups, computer equipment, software, and internet costs.

You could also provide your employees with additional company-issued tools and hardware if they request it.

Recommended Read: 22 Must-Have Tools for Remote Workers

2. Flexibility

The most significant and most immediate workplace shift due to the Covid-19 pandemic was remote working.

The need for more flexibility and freedom of work has prompted many firms to embrace this new culture. As workplaces re-open, you should consider the option to work from home or even create a remote work benefits package.

Workplace flexibility is a benefit in itself, especially when employees seek to balance their work and family lives.

3. Overall Well-being

A focus on well-being has set the tone for today's workplace. Embracing a holistic approach to overall well-being for all employees, employers have decided that it is now necessary to create a safe and nurturing environment.

Employers are creating special wellness programs for the employees to help employees cope with the repercussions of the pandemic. Some examples are virtual wellness sessions or even providing telemedicine coverage and waived Covid-19 testing charges.

Additionally, many workplaces have also focused on improving economic security, health, and quality of life for employees.

4. Additional Time-off

Remote work has its pros and cons. While some may be all for it, it can cause feelings of loneliness, stress, and even burnout.

One such recent example is when the dating app Bumble gave all of its employees a week's break to cope with burnout.

In addition to that, employees may also want to take time off for loved ones caring for a family member who has contracted the disease. In such times, keeping a focus on well-being specific to mental health will increase employee engagement and productivity.

Evolution of Total Rewards 2.0

Total-Rewards-2

The World at Work introduced the original model of total rewards more than 20 years ago. This model is very much in line with the mantra of putting people at the organization's center.

As described by them, "Total Rewards encompasses the elements – compensation, well-being, benefits, recognition, and development – that, in concert, lead to optimal organizational performance. Total Rewards programs fuel motivated and productive workforces that feel appreciated and rewarded for their contributions, driving the organization to ever greater success."

This strategy focuses on ensuring that all parts of the organization are working together to provide a rewarding experience for everyone.

The updated model of total rewards, as Total rewards 2.0, put forward by Enterprise Engagement, focuses on achieving organizational goals and values through a total rewards strategy.

This new version of total rewards focuses more on designing jobs that encourage innovation and collaboration. It also emphasizes the importance of providing employees with additional resources and training to be successful.

Total Rewards 2.0 is a strategy designed to improve the organization's profitability and align its human capital analytics with organizational goals, values, and mission.

Total rewards 2.0 encourages innovation, collaboration, and an environment of continuous learning. It emphasizes the value of employee engagement and employee experiences as a means of achieving organizational goals.

Total rewards 2.0 stands out because it is tied to both financial results and the organization's capacity to fulfill its purpose, values, and goal.

As per the article by Enterprise Engagement, implementing a digital approach is the way to achieve all this. Something that empowers collaboration, innovation, learning, rewards, and recognition on a unified, easy-to-use digital platform.

One such example of this implementation is the all-in-one employee engagement platform by Vantage Circle. It includes incentives, rewards and recognition, employee benefits, employee feedback, and wellness programs, all in one place.

The platform offers a unique integration of reward and recognition solutions to provide greater diversity to align with the organizational values and goals.

Chapter 3: Building a Total Rewards Strategy for Your Workplace

Building-a-Total-Rewards-Strategy-for-your-Workplace

What is a Total Rewards Strategy?

Total-rewards-framework

Total rewards are more than just a benefits package. It also includes incentives, training and development, recognition, and leadership development.

As defined by SHRM - "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 motivating work environment."

Having a total rewards strategy helps employers allocate their budgets and helps employees align rewards with their needs and preferences.

To fulfill your business strategy, you need to create a people strategy that will help achieve it. By aligning total rewards strategies and programs with overall talent experience, you can attain your workforce, and yourself's desired results.

Challenges of A Total Rewards Strategy

Total rewards strategy does not come without challenges.
The challenge here for leaders is how to create a total rewards strategy that attracts and retains a talented workforce while also meeting the overall company's goals and objectives.

Here are the common challenges that HR professionals face in implementing a total rewards plan -

1. Personalizing and Prioritizing

We have talked about personalizing each rewards program to suit every employee's needs. But it is easier said than done.

Every employee has a different set of expectations and needs. It can be a tricky process for a large organization, although today, technology has made it more accessible.

But the real challenge here is there's little to no input from employees in designing the total rewards plan.

Most companies create a total rewards system that is plain and uniform for the sake of compensation equality. But the key to an effective total rewards system is to prioritize each employee's requirements and ensure fairness and equality at the same time.

2. Spoilt for Choice

In the modern workplace, compensations get replaced by a more competitive and complex approach to rewards and recognition. There are so many best practices in the market that it becomes difficult to decide on a strategy.

HR professionals and leaders must choose a sweet spot that suits their organizational culture and values.

Ask yourself some tough questions about what you value most as an employer and how you can align your strategy with those values. The success of a total rewards strategy starts with a practical, integrated approach.

3. Not Keeping up with the Market Trends

Contrary to the above point, some industries are still stuck in the old pattern of throwing rewards at the workforce, like a stick of gum. Some don't know how to move beyond a few basic things like the yearly bonus or the award ceremony.

Technology and the changing nature of the workplace have changed the way employees want to be rewarded. It's no longer about the things we work with, but about the experiences we can have daily. In fact, for many people, their daily experience is now more critical than their monthly salary.

This is coupled with the fact that many managers aren't well-trained in recognizing their employees or giving them rewards.

It is advisable to conduct regular market research on compensation trends to avoid losing out on loyal employees and attracting the best talent.

Recommended: Employee Benefits & Compensation Ideas for Your Workforce

Implementing a Total Rewards Strategy

A successful total rewards strategy is not measured solely on the benefits you provide employees. It also should be evaluated based on its ability to attract, motivate and retain the best talent in a competitive talent market.

1. Assessing Your Current Total Rewards Strategy

Before you dive into your total rewards strategy, you need to take a step back and look at your organization holistically.

Start with assessing your current total reward strategy by evaluating its efficacy in achieving your organizational objectives. You can do it by conducting employee surveys that study their ideas and attitudes about their income, benefits, and possibilities for growth and development.

70% of employees said that fringe benefits would be a key consideration while searching for future jobs.

Questions like "How do the employees feel about their benefits package?", "Which employees are eligible?" and "Which achievements or behaviors should be rewarded?" will help you identify the strong and weak points of your total rewards plan.

Once you have the data, there are two areas to compare it with.

First, check if the compensation is fair with the compensation offered to the other employees. Next, examine if the compensation is appropriate to the prevailing market standards.

2. Mapping Out the Components

After assessing your existing total rewards strategy, it is now time to identify the components you want to include in your total rewards package.

Reward allocation should be a balancing act — how much do you want to allocate towards each goal? Which benefits to assign to each department?

Some businesses focus on one goal over another entirely. Keeping all of this in mind, determine which of the following components to be prioritized -

  • Compensation
  • Benefits
  • Professional development
  • Performance recognition
  • Work-life balance

Strategize your total rewards package by considering which components will motivate and suit the needs of your employees. This process will help you understand what your employees value the most.

This Glassdoor article tells us about the most valued benefits by employees.

3. Executing the Plan

Once the outline of the total rewards plan is ready, the adjustments you're making to your total rewards approach should be communicated to your staff. If needed fully, your employees need to understand all the points and send out materials to employees detailing the new policy.

You can also send out tailored materials to managers and decision managers to effectively measure employee performance.

Further Reading: 6 Steps In Building An Employee Rewards And Recognition Program

4. Evaluating the Impact

The plan must be measured so that it is accurately evaluated over time. Also, measurements of the plan's effectiveness are important to inform future changes in strategy.

The effectiveness of the total rewards program can be evaluated considering the employee retention rates, employee productivity, employee absenteeism, and overall business results.

I will be discussing this in the next segment.

Your total rewards strategy is an employment concept that serves to achieve maximum value for your business. It is a holistic approach to provide your employees with the reward items they deserve.

Evaluating the Effectiveness of a Total Rewards Strategy

An effective total rewards strategy is a highly tailored approach to employee engagement. It relies on how well it addresses the factors that influence employees, such as their needs, wants, and expectations.

Keeping this in mind, below are the key indicators of the effectiveness of a total rewards strategy-

1. Employee Retention Rate

In today's marketplace, it's more important than ever to ensure that you provide your employees with the motivation and opportunities to feel engaged, loyal, and inspired.

You can gauge the effectiveness of your total rewards strategy by analyzing your employee retention rates.

Employee retention rate is the metric that measures how many employees have remained with the organization over a while.

It is a key indicator of the success of a total rewards strategy because the more satisfied the employees are, the longer they are going to stick around.

2. Employee Productivity

If you are an employer, you know that a big part of your business success depends on the productivity and performance of your employees. Happy and satisfied employees will eventually result in more productive employees.

This is because your employees will be one of your most important resources. The more productive they are, the more successful your business will be.

Employers must understand how a successful total rewards strategy can enhance all aspects of employee experience and can maximize employee performance. It must promote a culture in the workplace that will help you retain top talent and improve overall productivity simultaneously.

3. Employee Absenteeism

We have already talked about how the total rewards strategy relates to employee retention. Still, you might not realize how it can impact employee absenteeism.

Studies show that a $1 increase in Total Rewards Strategy benefits results in a .02% decrease in overall employee absenteeism.

We must build a culture where people feel good about coming to work every day. A decrease in employee absenteeism can be a key indicator of your total rewards strategy doing its magic.

Chapter 4: Surprising Statistics on Total Rewards

Some-Statistics-on-Total-Rewards

Let's take a look at some of noteworthy facts that show the significance and impact of a total rewards plan.

Some-Eye-opening-Statistics-on-Total-Rewards

(Sources: Globoforce, Proofhub, LinkedIn, NorthStar, Deloitte, Achievers, SmartMeetings)

Chapter 5: Latest Top Trends in Total Rewards in the Corporate Jungle

Top-Trends-in-Total-Rewards-Program-2021

You need to keep a keen eye on current trends in rewards management to stay ahead of the game. Your job will also become seamless when you have a good grasp of the latest developments in this competitive industry.

Here are some of the most important trends to watch out for if you want to get ahead of the pack.

1. Focus on Mental Health

After the Covid-19 episode in 2020, employers have realized that mental and emotional well-being cannot be kept in the backseat any more.

A recent study by WHO has revealed that the worldwide economy loses $1 trillion each year due to depression and anxiety disorders.

It is highly crucial for organizations to bring focus on employee mental and emotional wellness. Start by assessing your employees' current state through surveys and questionnaires. Organize mental wellness programs and seminars. You can also give some additional time off to give your employees a much needed break.

This article will tell you the impact of rewards and recognition on employees mental health.

2. Diversity, Equity, and Inclusion

As a part of a more inclusive and liberal economy, organizations must embrace these positive changes in the workplace.

A Glassdoor report shows that 67% of job seekers consider DEI a critical factor in their job search.

Having a diverse workforce will also boost innovation and productivity. The employees also tend to show higher levels of trust, commitment, and engagement.

Listen to this podcast by Dr. Aparna Sethi, author of the book "Where To Draw The Line." Here, she talks about how businesses focus on DEI at all levels, especially when the world has gone remote.

3. Career Development Opportunities

It is estimated that millennials will comprise 75% of the workforce by 2025. According to a recent study, 91% of millennials agree that career development opportunities are their top priority in the job search.

This puts career development options on the list of top priorities for employers as well.

Employers are increasingly offering employee benefits to help employees improve their job skills and work toward their career goals. This is typically done through an employee development program. Also, the type of employee development a company offers will depend on the industry in which it operates and its size and location.

4. Revised Compensation

After the pandemic, organizations have adopted more flexibility in their work options. A recent study tells us that 80% of employees are still expected to work from home at least three times per week.

This focuses on compensating these employees based on their working conditions, such as geographic location and additional overhead charges.

Expenses and general cost of living can vary according to the geographic locations of the remote workers. In the same way, there can be additional expenses based on the job types, such as extra pieces of equipment and internet charges. Therefore, it is favorable to adjust their compensation accordingly.

Must Read: 7 Must-Have Employee Benefits For Your Remote Workforce

5. More Transparency

We all have witnessed massive layoffs and widespread employment crises at the onset of the pandemic. There were salary reductions or were suspended entirely.

Many of the employees took up social media or even went and filed legal lawsuits.

All this has led to the principle of conforming to more transparency in compensation plans and packages. You need to be transparent with your compensation to stay within legal guidelines and avoid being caught up in a wage dispute.

Some employers also have a severance pay package as a part of their total rewards package.

Chapter 6: Future of Total Rewards in HRM

Future-Of-Total-Rewards-in-HRM

HR is constantly evolving, with changing business demands and employee needs. But in the next five years, HR will experience a seismic shift in the way it operates. The "total rewards" vocabulary has been around since the 1960s. As businesses' and employees' expectations evolve, the meaning of total rewards is at a turning point.

But how will things change in the foreseeable future? What influences will make Total Rewards strategies even more important?

As the global economy shifts and a pandemic threatens our everyday life, employees are more concerned about the state of their health and their well-being. They'll search for companies that provide them with the most suitable health insurance and assurance of the best healthcare.

With the health and well-being of employees in mind, companies are prioritizing their total rewards packages. That goes beyond traditional offerings like retirement plans, health care, and sick leave.

With the unpredictability of the economy that all of us witnessed in 2020, employees are now more particular than ever. They are looking for a professional environment with opportunities for career advancement, learning, and growth, helping them gain a competitive edge in the job market.

As more employers are looking to expand their teams, this is an excellent chance for experienced employees to gain new responsibilities at work. But it's equally important for companies to provide them with the tools and opportunities they need to continue growing in their careers.

Such a program needs to be accessible and easy to use. It does not matter if the employee is at their desk in the office or working remotely from a laptop in another city.

As we welcome a new era of technological advancement and global competition, total rewards programs are in dire need of an overhaul. Rather than focusing solely on increasing salaries to stay competitive, businesses need to think bigger.

Suppose you approach total rewards strategically, aligning their investment to workforce priorities and needs. In that case, you can create a better employee experience and drive the success of their businesses.

Chapter 7: Some Useful Resources and Books on Total Rewards

Useful-resources-and-books-on-Total-Rewards

employee-rewards-and-recognition-banner

World-at-Work-total-rewards-book-1
The WorldatWork Handbook of Total Rewards - Get it here!

Employee-total-rewards-strategy-book-by-michael--ali-and-robert
Employee Total Rewards Strategy: Creating a New and Relevant Strategy for Employee Total Rewards - Get it here!

Creating-a-total-rewards-strategy-book-by-todd-M.-manas
Creating a Total Rewards Strategy: A Toolkit for Designing Business-Based Plans - Get it here!

Total-rewards-communication-handbook

Total Rewards Communication Handbook, Version 5 - Get it here!

Final Note

Companies have always needed to reward their top performers, but this need has been amplified in today's connected world. The ability to track performance and how it relates to business goals is more important than ever before. This is where total rewards come into play.

Today, employees want more than a paycheck and a retirement plan. They want a wealth of opportunities that will drive their sense of purpose and motivation.

Thadoi Thangjam is a content marketer and digital marketing executive at Vantage Circle. When she’s not geeking out over content strategies, she is probably hunting for the next perfect track to add to her playlist. For any related queries, contact editor@vantagecircle.com

Vantage Circle logo

Vantage Circle is a simple AI-powered Rewards & Recognition Platform for upgrading your employee experience and engagement for better productivity.