4 essential ingredients for a successful total reward strategy


Some reward professionals claim total reward is dead. I am one of the pockets of resistance in the industry and have a differing view. Total reward plays an important part and is an underused tool during recruitment and selection. A successful strategy depends on what definition you use to describe total reward.

In my definition, total reward consists of four distinct elements:

1. Base and variable pay
Base and variable pay is a monetary element and needs to be in line with market expectations for it to remain a hygiene factor. Depending on supply and demand and the level of competition your business is facing, you can decide to pay in line with the market, over the market or have the luxury to pay below market rate. There should be an element of fairness and a belief that your base and variable pay offering is in line with market expectations.

2. Pension and benefits
The second monetary aspect of total reward, pension and benefits, adds additional triggers for individuals to come and work for your company. Most people enjoy flexibility and choice when it comes to pensions and benefits and with the current multigenerational workforce, benefit offerings are expected to meet employees’ individual needs, irrespective of which stage they are at in their careers or personal lives.

3. Learning and development
The third element of total reward, learning and development, focusses on people’s career aspirations. Once the monetary elements have met their expectations, they will turn their attention to growth and development opportunities. They start to look at the opportunities their company offers. They make decisions about their next steps and whether they want to stay in their current position or look for a career change or advancement. Then there is the question of what their company can actually offer them and what opportunities are available to support their personal development. I see this as a great opportunity to link learning and development to the total reward offering and make it an integral part of the employee value proposition.

4. Organisational culture
The fourth and final element of total reward – organisational culture – represents all your company has to offer besides money, learning and development. What is it like to work for your company? How do people interact with each other? What management behaviour is common practice? Can employees relate to the hallmarks of the company – for example its history, financial performance, reputation and corporate social responsibility policies? For a lasting and fruitful relationship with their employer, however long or short this relationship may be, it is important that employees feel “at ease” in the workplace to perform to the best of their abilities.

Imagine a candidate has multiple offers for employment, why should they choose your company to work for? In these situations, I would not only focus on the monetary elements of the offering. This will satisfy in the short term, but in the long term learning and development as well as organisational culture are the main components to trigger the intrinsic motivation of people and help to retain your talent.

In my opinion total reward is alive more than ever. Reward is more than pay and you should use your total reward value proposition in your quest to recruit and retain those talented people that add value to your business.   

Henk Verhoek is head of international reward at British Sugar



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