When talking about compensation, pay is undoubtedly important but it is not everything.
The total rewards strategy takes into account other aspects of compensation that employees value, such as their time, flexibility, specific benefits, and more. Today, we will go over how to develop a total rewards strategy for your organization.
What is a Total Rewards Strategy?
The concept of a total rewards strategy is a system implemented by organizations to help provide incentives to their employees to achieve specific business goals. This rewards strategy helps unify all benefits under one program. The goal of total rewards is to increase retention of employees, as well as improve overall job performance. The incentives used in these programs can be monetary or non-monetary and each of them provide their own advantages.
Monetary rewards include bonuses, raises and all things with a definitive monetary value. These types of rewards are great when trying to recognize an employee’s efforts and good work. Non-monetary rewards include things like professional development opportunities, flexibility and self-actualization. It is crucial to take each employee’s individual goals into account when developing non-monetary rewards, because they are not “one-size fits all.”
Why a Total Rewards Strategy is Important
Implementing a strong and rewarding strategy helps motivate employees to excel in their jobs. As mentioned above, monetary rewards help employees stay motivated and continue to perform above par, because money is imperative. That being said, according to Forbes, money is not the only thing that employees hold at high value. When evaluating job satisfaction, employees should take a more holistic approach. A holistic approach includes evaluating non-monetary benefits, such as things like opportunity, flexibility and self-actualization. In fact, developing a rewards program that highlights professional development opportunities, allows employees to feel a sense of value when accomplishing their daily tasks. In turn, this brings meaning to their work as well as allows team members to feel seen and heard and is proven to be a driving factor when it comes to job satisfaction.
Flexibility is another key factor that employees hold at high value, especially in today’s world of remote and hybrid work. Forbes states that providing flexible work schedules or hybrid/remote work options allows employees to work on their own time and therefore has proven to increase employee productivity. All of these benefits help improve the quality of life of an employee and thus the overall health of your organization. Building long-lasting sustainable relationships helps drive employee retention and loyalty which increases ROI in the long run.