If there was a magic switch that instantly created a productive and thriving workforce, we can guarantee every employer in the world would be pressing it. But until then, managers and HR professionals have to make do with other methods.
Building and maintaining an effective team, while keeping them happy at the same time, is no easy feat. To be successful, your company needs to be able to attract and retain the right people.
You shouldn’t look for a silver bullet that’s going to solve everything in a single shot. The answer is more nuanced — a holistic and complete compensation package consisting of fair pay, benefits, and perks.
Whether they’re potential new recruits or long-serving stalwarts, it’s difficult for any employee to look past a competitive total rewards bundle that really takes care of them.
In this article, we’ll walk through all the reasons total rewards are so valuable, share a few examples, and show you how to best implement them.
A total rewards package combines an employee's pay with other integrated benefits as part of a wider compensation offering. It’s the amalgamation of everything you get from your company in addition to your salary.
Rewards can take many forms, but the important thing is they’re designed to be significant incentives for employees to either join or stay with your company.
Total rewards are basically about two things: reaching your business goals and employee satisfaction.
As HR professionals, we all know treating employees as individuals is one of the best ways to keep them engaged and motivated.
However, your aim when crafting a total rewards package should be to make that package as appealing as possible to the masses. To attract the best candidates, your company needs to have as much to offer as others do — if not more.
There are a variety of employee benefits that can make up a total rewards package. Let’s dive into the most common components.
Let’s be honest, where employee rewards are concerned, few are as immediately attractive as money.
Wages form the foundation of your rewards strategy, and they're probably top of mind for any employee or prospective talent when they think about your organization’s benefits. That's why it’s important to ensure your compensation structure is equitable, transparent, and aligned with labor market trends.
But monetary compensation isn’t just limited to a regular paycheck. Employers can add bonuses into the mix to enhance their offerings and incentivize performance. The size might be aligned to salary, or it could be a fixed number depending on the scale of a KPI your team hits or how an individual performs.
Having financial rewards baked into your total rewards scheme can make your company stand out from the crowd and motivate your workforce to go above and beyond.
Most employees look for more than just cash — they want a complete benefits package that's there when they need it.
Benefits can give employees a sense of security and look after their well-being. Common benefits you might include in your total rewards strategy include retirement savings and health, dental, vision, life, and disability insurance.
Benefits don't have to be limited to standard, health-related offerings. Get creative with less common ones like tuition reimbursement, wellness programs, and commuter benefits, for example. All these give value beyond a paycheck and can be a vital component of your total rewards strategy.
Who doesn’t love a vacation? Better yet, who doesn’t love taking one knowing their finances aren’t taking a hit while they’re away?
PTO is a great incentive, because it shows employees you value their lives outside the workplace and you’re willing to give them more time to do what they love away from the office.
Even better, they’ll come back recharged and ready to tackle the next task!
It can be very reassuring for employees to have passive sources of income — and few are more effective than company stock options. These options will vary depending on your company's size, worth, and so on, as well as the preferences of your employees.
Many employees will appreciate the opportunity to get involved with the business in this way. It gives them a more personal stake in your company while allowing them to reap further benefits down the line due to its success.
Continued learning at work can be incredibly fulfilling. Many employees love the idea of being able to grow within their roles.
You might consider offering specialist classes in your total rewards system or skill-based courses and mentorship opportunities. Ultimately, any development benefits you offer are good for both you and your people.
As the employment landscape continues to evolve, the employer/employee relationship is becoming more reciprocal. The benefits you provide your workforce can also benefit your organization.
As far as employee retention strategies go, few things are as helpful as handing your employees reasons to stay in the form of fantastic benefits.
When they know concrete, tangible rewards come as part of their overall compensation package, they won’t be as tempted to look elsewhere.
Plus, word will spread. Employees who’ve already benefitted from your total rewards package will be able to cite them to others as reasons they stay with your company.
It’s great when employees are self-motivated and driven to achieve company goals. A total rewards scheme can greatly encourage everyone to buy into a productive ethos.
With everyone enthusiastically working toward your aims, you can stimulate greater growth. You’ll also find it’s enjoyable to have motivated employees who are glad to contribute and don’t constantly need chasing to meet their targets.
A total rewards package keeps your people constantly incentivized, which means they’ll work harder toward your company’s success.
Let’s say you and a competitor are both trying to recruit a promising candidate. Pound for pound, you’re evenly matched. Your two offers look equally good. So, what advantage can you leverage to set yours apart? The answer is (you guessed it!) total rewards.
A package of benefits and perks can make all the difference for a candidate torn between two offers. What better trump card is there than being able to prove to a prospect your company is an excellent place to work with tangible perks?
Here are a few best practices to implement total rewards.
Your total rewards package offers a window into your company ethos, so it’s better if the glass isn’t foggy. Make sure what's included in your rewards program is super clear to both new and existing employees.
Achieve this with a total rewards statement. These documents show your employees the full value of their compensation with an itemized list of benefits, so they can see there's more to their compensation than the number on their paycheck.
Tailor these docs for each employee so they can get a clear look at their individual benefits.
You need to keep your rewards system as organized as possible — which can be a real challenge if you’re trying to manage it manually. Compensation management software helps track and implement total rewards for employees, so you don’t have to spend hours trying to work them out yourself.
With Paylocity, you can use dashboards to see performance and compensation history, which allows you to make data-driven decisions. Plus, those total rewards statements we previously mentioned can be generated in one click. In short, it’s a more time-effective and productive way of managing workplace rewards.
The last thing you want is for your total rewards package to be like an ugly holiday sweater. Your employees might feign gratitude for Great Aunt Gertie’s sake, but they won’t be worried about sparing your feelings if you’ve given them something they didn’t really want and never asked for.
Whether you’re putting together a total rewards strategy from scratch or optimizing your existing one, find out what matters to your people. Remember, you’re looking to increase employee motivation, not make them wonder if they should be seeking greener pastures.
Conduct regular employee surveys and make sure your total rewards package meets your employees’ expectations.
You’re unlikely to be the only employer out there offering a total rewards package, but that doesn’t have to be a disadvantage. See it as an opportunity to be the business offering competitive benefits and carve out a positive reputation.
Always look at the offerings of your rivals and capitalize on what they might be missing while making sure you’re not falling short yourself.
A total rewards system can prove irresistible to prospective candidates. It can also boost the retention rate of your current employees — who'd want to leave a comprehensive benefits package behind?
An entire total rewards system designed to show your workforce you see and value the effort they put in is almost guaranteed to invigorate and uplift them.
Getting started is a cinch with Paylocity. Our platform is designed to make building your compensation strategy quick and easy.
See what we can do for you. Request a demo today!