Your company’s Total Rewards Package is one of the most important investments your company will ever make. A well-developed program can help attract, motivate, and retain top talent; reinforces your brand and differentiate you from your competitors; and raise employee awareness and appreciation by focusing on what you offer. So how does your Total Rewards Program stack up?
Total Rewards and Performance
Companies know that it takes more than just base salary to motivate employees to consistently perform at high levels but are they taking full advantage of their Total Rewards Program? According to a recent survey conducted by Aon Hewitt, 58% of organizations surveyed use Total Rewards Programs to drive employee engagement, while 48% want their program to assist in retaining top-talent and or attract talent (44%). However, 60% of companies surveyed site low engagement levels, and two-thirds say employee engagement is steady or expected to decline.
So the question remains, what are those companies, who are rating their employee performance as high, doing differently? Well, according to Aon Hewitt, it’s all in the way they execute their Total Rewards Programs; each successful organization surveyed shared these qualities:
- They articulate clear strategies and goals – High-performing companies are almost two times more likely to have declared total rewards an area of focus and have a clear stated strategy compared to the rest of surveyed companies. They are also more focused on leadership development, culture and learning.
- They use data and input to drive decision-making – Three-quarters of high-performing companies gather market data to assess the competitiveness of their programs, compared with just 61 percent of all other companies. Additionally, high-performing companies are more likely to gather cost data (57 percent vs. 39 percent) and input from employees (40 percent vs. 26 percent)
- They connect their total rewards program to the business and employees – High-performing companies are more likely to align total rewards programs, such as those that focus on culture, challenging work and pay benefits, with top business objectives. Therefore, they communicate better and use targeted communications to meet the diverse needs of the workforce.
- They define the effectiveness of their total rewards programs differently -- the primary way high-performing companies define the effectiveness of their total rewards programs is by measuring employee engagement, while the rest of companies define effectiveness as cost versus budget.
Because of these differences, 51% of high-performing companies say their employees understand the value of their Total Rewards Programs compared to one-third of all other companies, showing that it’s not only important to have a well-executed program but it is also vital to communicate the rewards to each employee.
How To Use A Total Rewards Statement
Something that has gained momentum over the years is the use of Total Rewards Statements to communicate the value of an employee’s reward package. Many times employees will be unaware of their total rewards and be tempted to leave for another opportunity over just a few thousand dollars. That’s why it is important to present a crystal clear message of all you offer to your employees. In order to help attain full benefit of a total rewards statement employers should be sure to:
- Invest in pre-Total Reward Statement communication – tell employees their total reward statement is being delivered
- Use accurate and up-to-date data to strengthen the effectiveness of reward statements
- Put statements out on high quality paper and strongly consider posting statements on a secure, web-based system for easy access and real-time visibility
- Have sufficient resources available to deal with employee queries
- Include financial and non-financial benefits (health, vacation, wellness programs, etc.)
With the still recovering economy, it’s more important than ever to communicate the benefits received in addition to pay. Using a Total Rewards Statement can act as a reminder to employees that although their pay may not increase, they are still receiving other benefits that show the company’s appreciation and remind them that they are still valued as an employee.
When executed properly, your Total Rewards Program can give you the competitive edge needed to recruit and retain top-talent while also motivating employees to perform at levels that meet your corporate goals.
How does your company communicate your Total Rewards Program to employees? Do you believe your program and your statements have an effect on employee performance? We’d like to hear from you so please leave us a comment and share with your colleagues.