Research and experience suggest that the components of total rewards and the EVP are interdependent and compatible
Total rewards” has been in the HR lexicon for well over a decade, but during much of that time, organisations have focused more on discussing than implementing the concept. Recently, however, strong global competition for talent and shortages of critical-skill workers — particularly in the fast-growing economies of Asia — have driven a surge of interest in applying core total rewards principles in designing and delivering workforce programmes.
With greater attention on cost of total rewards programmes, the need to demonstrate value for cost is critical. Doing that means viewing programmes as employees do — as a set of related plans that offer support and security in ways that matter, and shape decisions about the organisation and the discretionary effort that employees bring to their work.
By "going total" in the total employment deal, companies can meet three critical goals:
1. Accurately "sizing" aggregate investment to ensure it's in line with financial realities
2. Improving value-to-cost relationship by allocating total investment in ways that will drive the right employee behaviours
3. Creating a framework that adapts easily to the changing needs of the business across different countries, employee segments or divisions.
Components of total rewards (Indicative)
Base Pay • Perquisites • Allowances • Retirement • Health Care • Life and Disability • Other Welfare Benefits • Wellness Initiatives • Voluntary Benefits • Discounts/Affinity Programs • Time Off
Career and Environmental Rewards
Career Management Programs • Talent Mobility Programs • Training/Development • Flexible Work Programs • Rewards of Association (Indirect) • Employee Assistance Programs • Mentor Programs • Discretionary Technology • Work/Life Programs •Corporate Social Responsibility Programs • Well-being Programs
Base Pay Increases (Merit, Promotion) • Short-term Incentives • Long-term Incentives •
Recognition • Profit-Sharing Plans
Research and experience suggest that the components of total rewards and the EVP are interdependent and compatible. Companies today face an inflection point relative to their total rewards programme and the most progressive are addressing the economic slowdown by recrafting their EVP, thus optimising their investments.
Subeer Bakshi, Director-Talent and Rewards, Towers Watson India