Reward research: squeezing every last drop of value from pay budgets
Designing a reward strategy that helps employees’ pay to go further and that emphasises the full value of a reward package is no mean feat. We’ve brought together four of the latest research reports that focus on Total Rewards and how to get the most out of remuneration budgets.
The evolution of Total Reward
Leading organisations are using breakthrough approaches to Total Reward design and delivery to ensure they are agile enough to keep pace with the evolving workforce. Willis Towers Watson's Mapping the new Total Rewards journey highlights that pay is only a small factor in employees’ expectations of their employer and that Total Reward needs to encompass pay, benefits, wellbeing and careers.
For employers, having access to the latest technology that allows them to make better base pay decisions was found to be key. Around three-quarters of the organisations surveyed used software other than spreadsheets to enable the implementation of their base pay programme.
Furthermore, the research demonstrated that employers should not underestimate the value employees put on fair pay. Employees are keen to see that there is no bias or inconsistency in the way that pay is awarded, which ties into the trend towards greater pay transparency.
Getting communication right
Businesses must take control of communication to provide employees with a better understanding of the value of benefits if they are to improve financial wellness, according to findings from JLT Employee Benefits’ Thinking Beyond Reward report.
Although this report focuses on how businesses can improve mental and physical wellbeing by helping people achieve – rather than worry about – financial goals, it makes some interesting points about the need to communicate and educate staff effectively on the benefits available to them. In particular, it urges employers not to make assumptions about individuals’ knowledge of finances.
Delivering high-impact compensation programmes
The 2018 Willis Towers Watson Getting Compensation Right Survey explores how technological, cultural and legislative changes are influencing reward practices around the world.
The report highlights five key areas that employers need to consider when developing a reward strategy: the factors that determine base pay; the differentiation of incentives; the use of technology; the need to prioritise fair pay; and building a culture of pay transparency.
Engaging with millennials
A key cohort in today’s workforce are millennials, and they in themselves bring their own reward challenges. Aon Employee Benefits’ Compensation planning for millennials report considers how employers can integrate the expectations of this generation into their reward programmes.
As the other reports have outlined, career paths, education and training are key to Total Reward, with many in this generation keen to progress. As such, the report finds that base salary provides a foundation to access opportunity and variable pay provides a way to recognise those who make the most of the opportunity – something that millennials respond well too. In addition, this generation highly values transparency and want to feel like their work is making a difference.
Unsurprisingly, all of these reports suggest that simply paying an employee more isn’t necessarily the way to get the best engagement or productivity out of them. Instead, getting value out of pay has far more to do with employees understanding the value of their remuneration, where they sit compared with others, whether they receive recognition for their efforts and ensuring that their personal development is being nurtured.
The REBA Reports Library has hundreds of reports, surveys and other handy documents pulled together from a myriad government departments, academics, independent organisations and suppliers. We have pulled them together for our members to use to find the data they need to support business cases, presentations and other reward work.
Dawn Lewis is content editor at the Reward & Employee Benefits Association.
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