We can define Total Rewards as “All of the tools available to the employer that may be used to attract, motivate and retain employees. Total rewards include everything the employee perceives to be of value resulting from the employment relationship”.
There are five elements of total rewards, each of which includes programs, practices, elements and dimensions that collectively define an organization’s strategy to attract, motivate and retain employees. These elements are:
The elements represent the “tool kit” from which an organization chooses to offer and align a value for both the organization and the employee. The elements are not mutually exclusive. Total rewards strategy involves the art of combining the five key elements into tailored packages designed to achieve optimal engagement. An effective total rewards strategy results in satisfied, engaged and productive employees, who create desired business performance and results.
In a globalize world where local laws and regulations change constantly the impact of C&B becomes more important, so the corporate strategies and remuneration systems need to be adapted to different industries and countries in order to provide the best social and fiscal optimization possible for both the company and the employees.
Compensation and Benefits (C&B) area is considerate the main and critical area inside Total Rewards and HR. That´s why C&B is in charge of important aspects for an organization as retention, employee motivation and engagement… and also it´s involved in Mergers & Acquisition, Boards and corporate governance. Sure, in times of crisis C&B manages the cost-cutting efforts, crisis management and reductions in force.
Market research about the worth of similar jobs in the marketplace.The compensation is based on 5 aspects:
- Employee contributions and accomplishments.
- The availability of employees with like skills in the marketplace.
- The desire of the employer to attract and retain a particular employee for the value they are perceived to add to the employment relationship, and
- The profitability of the company or the funds available in a non-profit or public sector setting, and thus, the ability of an employer to pay market-rate compensation.
Inside Total Reward Strategy we must taking into consideration other payments such as bonuses, profit sharing, recognition rewards and checks, and sales commission. Compensation also includes important benefits as pension plan or healthcare, company-paid car, stock options in certain instances, company-paid housing, and other non-monetary, but taxable, income items.
Why Total Rewards?
- You never stop learning.
- You never do exactly the same thing twice (no, not even for your annual processes such as salary reviews or bonus pay-outs).
- You can use your creativity to design and implement solutions that will truly support your company and its employees
- You negotiate with providers to get the best conditions and prices possible for Social Benefits (Health & Life Insurance…) to all employees of the organization.
- You learn and know about Tax & Regulations in each country in order to apply the benefits in the best way for the company and employees.
- You get involved in many aspects of running the business, and through it, get real exposure to the organization, with Finance, Sales and Marketing obviously, but also with the business… and the rest of HR.
- You can bask in the “techie” or “geeky” side of your nature through advanced use of Excel. Simulations and multiple scenarios analyses, and the legal, cost and fiscal implications of your decisions.
- You are at the forefront of the organization, in good times (distributing bonuses and introducing new rewards and recognition practices) and in bad times too (figuring out cost control mechanisms and redundancy plans).
- You interact with people at all levels of the organization, from the junior staff through to line managers, to top Executives and the Board members.