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Total Reward Statements can help you to engage employees and demonstrate the overall value of the reward package you provide.

Reward statements are a simple, yet underutilised, method of helping employees quantify the advantages of your business’ reward strategy. Through this brief guide, the employee engagement strategy experts here at Paydata will highlight everything you need to know about total reward statements, including what they are, why you should make use of them and how to effectively implement one into your existing rewards system.

What is a Total Reward Statement?

A total reward statement is a personalised document, used to outline exactly what an employee has received from their employer over a set period of time. The total reward statement is designed to highlight everything that the employee has benefited from, both financially and non-financially, as part of their overall reward package. This is a very simple way of showing the true value of your business reward scheme and system.

Why use a Total Reward Statement?

All employees seek fair remuneration packages for their work. There are countless services and articles out there showcasing how to be paid what you’re worth, or how to react if you don’t feel valued. Similarly, there has been plenty of research around the topic of employee reward strategies and their links to employee engagement, all of which display that employees who feel like they aren’t awarded appropriately for their work are less productive, less engaged and more likely to leave.

Total reward statements are an extremely simple, but effective, way of helping to overcome an employee’s potentially negative perception of their reward package. The concept of the reward statement is to highlight every benefit of an employee’s reward package, both financial and non-financial, including bonuses, benefits and holiday entitlement. This offers both the employee and employer an easy to reference tool where they can quickly quantify what they are receiving from their employer, much of which is often overlooked.

This is particularly effective if your business operates on a ‘low-pay-high-benefit’ system, where you might pay underneath the average wage but in exchange, offer significantly better benefits than other organisations within your sector.

Ultimately, the addition of a total reward statement is an excellent method of improving employee engagement and retention. By systematically and methodically working through the benefits, it becomes clear just how much you are investing in your staff, building trust in the employer-employee relationship. Similarly, with a more accurate figure for how much the business thinks they are worth, employees are more likely to stay with you, particularly if the benefits help your remuneration and reward scheme exceed the value of most other organisations.

If you are struggling with low staff morale, motivation, retention or engagement, total reward statements are an easy place to start that will have a large and noticeable impact - as long as your reward scheme is appropriate.

What should be included in your Total Reward Statement?

The total reward statement should be comprehensive and cover every aspect of an employee’s reward package. This includes traditional benefits like base salaries, bonuses and pension schemes, as well as additional benefits like gym memberships and medical insurance.

Most importantly, the total reward statement shouldn’t just list these advantages, it must also illustrate their value. You should never be afraid to highlight your business’ expenditure on an employee. Being honest and clear about how you value staff is both appreciated, recognised and remembered, so be as transparent as possible.

The reason why making the monetary value of each benefit package clear is that numbers and statistics are innately seen as more valuable and accurate. Simply listing the benefits that the employee enjoys would render the total reward statement obsolete because it would just be compiling information from an employee’s contract into a shorter document.

Instead, make sure to include monetary values where you can and then add them into a total value, showing each employee the value of their rewards package in a simple and easy to absorb manner. Below, we have included an example total reward statement to help you create your own.

See an example of a Total Reward Statement:

See an Example of a Total Reward Statement

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How to implement a Total Reward Statement

Implementing a total reward statement is a relatively straight-forward process, but our experts will guide and support you every step of the way.

At the heart of every successful business venture is a desire for continual improvement. Whilst you may feel that your employee reward strategy is adequate and inclusive, analysis of employee behaviour towards your total reward statements, as well as employee behavioural trends after seeing their total reward statement, can all say otherwise. In this situation, consider investing in reward strategy consulting or conduct employee research to assess issues and create an effective path to improving your current system.

As a final note, the timing of your total reward statement can also impact its effectiveness. Consistency and regularity are important, so presenting the statements annually or bi-annually is always a good option, though the perfect timing can vary from business to business.

Paydata’s Employee Engagement Support Services

Paydata offers a vast range of services that can help you shape your employee reward strategy, implementing total reward statements and further tactics to create a rewards system that drives employee engagement and in turn, business growth.

If you would like further support with any aspect of engaging your staff, please don’t hesitate to get in touch or discover our range of employee reward services here.

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We are offering a free consultation to anyone that wants to use Total Reward Statements in their organisation.

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