Why total reward matters
Total reward is all about looking at the big picture; looking at everything employees would value about working for your business. It’s about making sure your organisation is delivering the right things in the right way for your employees.
For every organisation, the mix of the following elements and how they fit together will be different, but a total reward perspective helps you appeal to current and potential employees in a much broader way. And getting it right enables you to attract and retain the best talent.
1) The pay
Is the pay you offer fair within your organisation and competitive compared to others? Is it enough to suit the skills and experience required to do the job?
2) The benefits
You might have a huge list or a fine-tuned selection, but is the choice of benefits available relevant to and valued by employees?
3) The recognition
This is key to making employees feel valued and appreciated, and therefore engaged. Whether it’s a thank you, extra time off or a gift for going above and beyond, are your employees recognised by managers in your business?
4) The work
Do employees find the work they do interesting, challenging and rewarding? Can they develop new skills and experience that they, and you, value?
5) The development and progression
A sense of achievement and personal development is important to most. Do your employees understand how they can progress within the business? Do they have access to education and training – work related or not?
6) The working arrangements
Some employees may prefer to come to work, go home and switch off at the end of the day. Some may prefer more control over where and when they work. Can you provide options for flexibility or agile working alongside set hours?
7) The culture
The working environment should reflect the type of people you want to attract. You may have a creative, buzzy workplace or calm and peaceful environment, but does it suit your employees? Is it conducive to the type of work they do?
The total reward perspective also encompasses the more intangible aspects that are expected from a good employer. Fairness, transparency and clarity are all key issues and will become increasingly important over the coming years because of social, legal and political pressures on businesses. They will also continue to be big deciding factors for people choosing an employer:
It makes a huge difference when employees feel they’re being treated fairly; being rewarded fairly compared to colleagues, compared to others doing a similar job and regardless of gender, ethnicity or social background.
Transparency and clarity
Society demands ever-increasing transparency. Whether it’s politicians sharing their tax returns or CEOs declaring the ratio of their pay compared to the average employee, we’re all hungry for more. Your workforce also wants information, particularly when it comes to reward – what are they entitled to and how much is it worth?
Total reward in action:
Here’s a few examples of how some companies are changing the way they look at total reward. The ideas aren’t right for everyone, but what these companies have done is think about what’s valuable to their employees and developed meaningful processes and rewards that suit different demographics and work for the business:
Adobe has removed annual performance reviews and created ‘check ins’ – an informal and grown-up chat between employees and managers to jointly agree expectations.
Netflix (and others) has introduced unlimited annual leave. Their view is that if an individual is trusted to do their job, they can manage their own annual leave. The reality is that employees end up taking less annual leave than they would with a set number of days.
Google wants to make its employees’ lives better and easier. The company provides free lunches, dry cleaning services and gyms so employees can access everything they need without having to leave the office.
Deloitte offers support to employees who need emergency care for adults as well as children when they have to work e.g. an elderly relative or sick spouse.
Valve has taken away the management role from pay increases and performance, and instead uses peer ranking to determine who gets what pay increase.
Total reward matters and your approach to it needs to adapt to fit with the world we live in now. Social, political and technological changes have changed the way we’re living and working and it’s important that your business keeps up with these. Your total reward perspective should reflect your organisation’s DNA, values and purpose, and needs to be fair, ethical and workable for the business and your employees.
Justine Woolf is client director of Innecto Reward Consulting.
This article was provided by Innecto Reward Consulting.
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