Traditional Reward Strategies
It was not too long ago that reward simply meant salary and bonuses, and this was the sole driver for attracting and retaining talent. In short, there was a simple transactional model in place in which employees worked in exchange for pay. Despite this, the landscape has since evolved, and workplaces have become more complex, meaning total rewards have had to do the same.
While monetary compensation is essential, it does not address the varying needs and motivations of an increasingly diverse workforce. There is much more to work than financial rewards; instead, employees wish to be acknowledged for their contributions, supported in their wellbeing, and facilitated in their professional growth.
Expanding the Definition of a Total Reward Strategy
Both financial and non-financial rewards need to be combined to acknowledge and motivate employees. In addition to base salary and bonuses, it is now commonplace for employers to offer private healthcare, pension schemes, and much much more in their reward packages. From this, a more comprehensive offering is created, allowing organisations to better cater to the diverse needs and preferences of their employees.
Examples of elements of a reward strategy:
- Compensation: Base salary, bonuses, and financial incentives.
- Benefits: Private healthcare, pension schemes, and other perks.
- Work-life balance: Flexible schedules, remote work options, paid time off, etc.
- Recognition and appreciation: Acknowledgement of accomplishments and contributions.
- Career development: Opportunities for learning, growth, and advancement.
- Work environment: Organisational culture, values, and workplace atmosphere.
Shifting Focus to Culture With Your Reward and Recognition Strategy
In order to attract and retain employees, companies must offer total rewards that support a positive workplace culture. While culture was once considered an intangible aspect of the workplace, it has since become a central component of total rewards.
Employee engagement: A positive culture engages employees and fosters a sense of belonging. Open communication, collaboration, and a shared commitment to organisational values are all integral to a culture that engages employees.
Wellbeing initiatives: Wellness programmes, counselling services, and work-life balance initiatives have all become commonplace in the workplace. This is because companies are keen to invest in the wellbeing of their employees, making this a key element of total rewards.
Inclusive practices: Not only is a diverse and inclusive culture a moral imperative, but it is a strategic advantage, too. Inclusivity is an integral part of total rewards, as it promotes diversity in hiring, provides equal opportunities, and reinforces an inclusive work environment.
Learning and development opportunities: Companies that invest in professional development are more valued by employees than those that do not. Total rewards are now supported by providing opportunities for skills-building, training programmes, and mentorship initiatives.
Flexible work arrangements: The importance of flexibility has only been emphasised by the rise of remote work. In order to support flexible and remote working arrangements, companies are adapting their approach to recognise the fact that a one-size-fits-all attitude does not necessarily meet the varying needs of the workforce.
The Integration of Technology Into Your Total Rewards Strategy
It goes without saying that technology has evolved massively over the years, and it is continuing to develop at a rapid pace. HR management systems and employee engagement platforms are just two of the technologies that have grown and developed over recent years, and they are integral to total rewards.
Data-driven decision-making: With the help of technology, companies are able to gather and analyse data better to understand the preferences and needs of their workforce. From this, total rewards can be customised to align with the expectations of individual employees, whilst also ensuring corporate goals and requirements are supported.
Communication platforms: For total rewards to be successful, transparent communication is unequivocally vital. Technology allows for real-time communication, which means that employees are well-informed about the various components of rewards packages.
Automation of processes: Many elements, such as benefits enrolment, performance evaluations, and other administrative tasks linked to total rewards can be automated. By streamlining these processes, HR professionals are then able to focus on the more strategic aspects of total rewards management.
The Role of Leadership in Your Reward Scheme for Employees
When it comes to shaping and sustaining a company culture that aligns with total rewards, quality leadership is essential. Leaders are required to embody the values they wish to see in the workplace, champion inclusivity, and actively support initiatives that contribute to employee wellbeing.
Setting the tone: Leaders who prioritise transparency, accountability, and employee development contribute significantly to total rewards.
Embracing change: Leaders must be adaptable and open to change by embracing new technologies, work models, and cultural shifts if they want to remain competitive in the employment market.
Employee-centric leadership: Employees should be placed at the centre of your total rewards strategy. If a leader prioritises the needs and aspirations of their workforce, this creates a culture that values and rewards individuals.
Challenges and Future Trends in the Pay and Reward Strategy Landscape
There is no escaping the fact that a focus on total rewards has brought about positive changes; however, this is not to say that there aren’t challenges. Total rewards need to be balanced and appeal to each employee.
Personalisation: In order to address the unique circumstances and preferences of employees, total rewards would benefit from becoming more tailored.
Emphasis on wellbeing: The awareness of wellbeing, including mental health, is growing and means companies must offer solid support systems as part of their total rewards strategy.
Globalisation: As a result of remote working, companies are able to extend their reach on a global scale – the reward strategy will need to reflect and support this.
Continuous feedback and recognition: Many employers are moving away from traditional annual performance reviews and now provide real-time feedback and recognition.