Total Rewards Programs (Part 1 of 4)

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What do you do when your talent goes down the road because the competition is paying more?  You look at your total rewards program, or lack thereof and determine what you can offer to attract and retain employees in a highly competitive labour market.  A Total Rewards Program is a strategic tool that should be in your arsenal.

Besides losing technical skills, business intelligence, and productivity, your company faces a highly competitive labour market and a high probability that the position will be vacant for some time.  What could you be doing to increase the likelihood that an employee who is comparing base pay with another company will decide to continue working for your organization?

One way to hone your edge is to implement a total rewards program.  A total rewards program focuses on increasing employee awareness on what the total compensation package looks like beyond base pay.  Pay does not end at base pay but includes incentives, benefits, work-life balance, performance and recognition, and development and training.    A total rewards program provides a total dollar value of the program as well as awareness of non-tangible rewards such as time off without loss of pay and health and wellness.  A typical total rewards program shows that base pay is only 60-75% of total rewards.

The first step in determining if a total rewards program is right for you is to assess both the external and internal environment.  Understanding the competitive environment and where your company’s total compensation should be benchmarked in your industry is an important first step.  It is also critical to ask yourself if your company’s state of readiness for a total rewards program is a “green light” and whether the program will support your business strategy, human resource strategy, and organizational culture.  Jumping on the total rewards program bandwagon without understanding the external and internal context can jeopardize achieving the objectives of your program:  attraction, motivation, and retention.

Our next blog will focus on the five key components of a total rewards program.


About the Author:

Peggie leads both executive search at InTell Executive Search International and the performance improvement practice at Koenig & Associates. Her forte is organizational and individual performance improvement through pragmatic human resources strategies and executive coaching. Peggie lives in a part of Saskatoon she calls the Urban Forest. When she’s not bird-watching on her deck, she trains for marathons by running up the banks of the South Saskatchewan River.

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