As organizations are entering into a new era of disruption, they are undergoing a metamorphosis in terms of their approach towards rewarding employees. Total Reward, as a concept has garnered attention in the past few years mainly for the three reasons – first being the emergence of multiple generations working together who carry diverse needs and strong preferences. Today’s workforce is highly exposed to the world of technology, they articulate their needs well, and wants the best of everything At the same time, corporate world is witnessing the rise of gig economy and part-time workers. The second reason behind the emergence of the total rewards is the direct linkage of rewards with employee retention, engagement and business outcomes. It has been seen that despite the focus and investment on ‘cash’ rewards, satisfaction and engagement levels among employees are abysmally low; their retention is still an area of concern. The third reason is the rising cost of the rewards and the pressure on corporate to showcase a ‘Return on Investment’ (ROI) on the total reward spends.
Let’s look at some of the ways by which organizations can weave in differentiators in their existing reward strategy:
Recognition is often an overlooked element while rewarding employees. Employees often feel disengaged when they do not receive adequate recognition for their achievements. According to O.C. Tanner and Aon Hewitt’s recent recognition study- having an effective recognition program can create up to a 40% difference in engagement. Praising people and recognizing them for their hard work will go a long way and reap a greater benefit. This practice can simply be started organization-wide by encouraging people to say “Thank you for excellent performance” to each other, more often.
Mass customization of rewards:
When we are living in an age of customization and personalization, why should our total rewards strategy be left behind? Organizations that are able to customize their rewards programs to meet specific employee needs are becoming increasingly successful at attracting the top talent. Rewarding employees with vacation when they need and paying student loans are becoming popular.
Trading off pay for work-life balance:
Many organizations are focusing on finding unique options for employees who are seeking to trade off free time for salary. Some tech firms are currently experimenting with shortening the length of the work week, which offers employees the unique opportunity to sacrifice salary for hours. Similarly, designing around telecommuting appears to be increasingly important. Companies that value and provide for work-life balance will likely to have more engaged employees as they feel that their needs and preferences have been taken into account.
Organizations that are able to customize their rewards programs to meet specific employee needs are becoming increasingly successful at attracting the top talent
Furthermore, since organizations are also concerned about the looming cost spend on rewards, they are experimenting with ways to contain the cost by focusing more on enhanced communication, job enrichment, career and succession planning and internal promotions, et al; rather than on increasing pay levels.
- Aligning total rewards with organization’s business strategy: While formulating the total rewards approach, it is important to ensure that it is aligned with organizational business strategy and bigger objectives.
- Integrating total rewards with key HR process: When the total rewards approach is tied with key HR processes, the entire experience itself becomes highly engaging and rewarding.
- Aligning total rewards with employees’ specifics: In order to keep today’s diverse workforce engaged and happy, it is increasingly important to be mindful of ‘what they like’ and ‘what they want’.
As rewards professionals, it is critical to focus on continuous development to stay on top of trends and design a game-changing strategy.Learning on the job is best augmented by structured Learning programs like Aon’s flagship Certified Rewards Professional which is spread over 4 days. The program helps rewards professionals to explore the essentials of total rewards strategy, internal equity, external competitiveness, pay management and incentive design.
This article is curated by Dr Arunima Shrivatsava