Recruiting and retaining a high-quality workforce while keeping costs under control is a challenge for many business owners. A total rewards program can be an effective tool in helping you meet these goals and distinguishing your business as an “employer of choice.”
What is a Total Rewards Program?
A total rewards program includes all the tools an employer may use to attract, motivate, and retain employees. You may already be providing many perks and benefits for your employees; however, the way you communicate these offerings is what sets you apart as an employer of choice.
Grouping your benefits together and presenting them as a total rewards package can make an impressive statement to your current and prospective employees.
Here are some examples of elements that can be included in a total rewards program:
- Base and variable pay
- Cash incentives
- Performance bonuses
- Health, dental, and vision insurance
- Retirement savings plans
- Stock options
- Life insurance
- Disability insurance
- Wellness program
- Employee assistance program (EAP)
- Employee discount program
- Identity theft protection
- Prepaid legal
- Pet insurance
- College savings plan
- Paid time off
- Flexible schedules
- Remote work
- Community volunteer opportunities
- Encouraging development of personal interests
Growth and Development
- Company-sponsored training
- Performance recognition program
- Colleague recognition platform
- Career ladder framework
- Subject matter expertise development
- Tuition reimbursement
- Mentoring programs
These elements are interdependent and may have different values and importance to each employee. Ultimately, the outcome of a total rewards approach is to provide employees with a combination of monetary and non-monetary rewards to motivate them to maintain a desired business performance.
“Total rewards encompass not only compensation and benefits but also personal and professional growth opportunities and a motivating work environment.” ~ Robert L. Heneman, The Ohio State University
Benefits of a Total Rewards Program
A total rewards program is an effective method for showing you value your employees and are vested in their job satisfaction and growth.
Total rewards programs have been linked to increases in overall employee performance and satisfaction. They contribute to a more loyal, productive, and engaged workforce.
Creating and Implementing an Effective Program
Developing a total rewards program that meets the needs of your employees and aligns with your business goals takes careful planning and preparation. The following steps can help you develop a solid program.
- Identify what benefits, perks, and rewards are most valuable to your employees. This can be done through informal conversations, surveys, focus groups, etc. Ask employees what rewards they value most, what attracted them to your company, and what keeps them loyal to your organization. Keep these findings in mind throughout the rest of this process.
- Evaluate your current benefits and perks to identify any gaps between what you are offering and what employees desire to have available.
- Identify and analyze various rewards strategies to determine what would best suit your workplace. Consider pay rewards, nontraditional benefits, and personal development opportunities to further company objectives. Include incentives that will excite and retain employees long term. (See list at beginning of this article for ideas.)
- Define your total rewards program based on your findings. The program should be specific to the needs of your employees and align with your business goals. While you may not be offering a whole new set of benefits and perks, you should be reframing your traditional compensation and benefits packages as a “total rewards program.”
- Implement the new system by publicizing it to your employees and educating management personnel.
- Train employees on how they can use the program to achieve results for personal success and for company goals. To help employees understand the concept of total rewards, there are many online tools that will allow them to view information on benefits and compensation statements, learning opportunities, paid time off, educational reimbursement policies, wellness activities, career development, and recognition programs.
- On a consistent basis, communicate with employees concerning what incentives are offered and how they can take advantage of the rewards in their unique circumstances.
- Periodically evaluate the program’s effectiveness and make necessary changes to further achieve your goals.
A key component of an effective total rewards program is how it is presented to employees. Making benefits or rewards easy to understand and utilize is a must. Having one resource (employee handbook, internal website, etc.) that introduces all the components and how to take advantage of them will show that you want your employees to use these benefits, as opposed to merely offering them discretely.
To learn more about implementing a total rewards program and tools you can use to manage your benefits, contact your Leavitt Group insurance advisor.