Article: India Inc. take on Total Rewards

Benefits & Rewards

India Inc. take on Total Rewards

Total reward is the term adopted to describe a reward strategy bringing together all the investments an organization makes in its workforce (e.g. pay, pensions and learning and development), with everything employees value in working for an organization, such as flexible working and career opportunities. But effectively has India Inc been able to use it to their advantage?
India Inc. take on Total Rewards

Since the time of Pavlov, rewards have formed an intrinsic part of employee management. By rewarding the right practices by employees, businesses are able to generate employee motivation and create an incentive for them to be productive. This concept, over the years has now evolved into its present form where HR professionals today design comprehensive Total Rewards programs which look at incentivizing the right practices and keeping the employee motivated and engaged. This is done by using components like compensation, rewards, benefits in addition to providing health benefits, personal and professional growth opportunities and a motivating work environment. All this today forms a part of a good Total Rewards program. Total Rewards programs are slowly but surely influencing organizational dynamics. This is true for Indian businesses as well. The latest TJinsite study by Times Job has found that out of the nearly 43 percent of the 442 employers surveyed across India by TimesJobs, have a well-built Total Rewards strategy in place and for about 23 percent it is in the planning stage. The modern understanding of Total Rewards ensures that employers include not just the components of encompassing not just compensation and benefits but also capture the essential elements of a motivating work environment, learning & development opportunities, recognitions, and professional growth opportunities. 

Organizations today are cognizant of the fact that innovative and comprehensive total rewards strategy can help prove beneficial in multiple ways. These benefits range from increasing business output to retaining and engaging their top performers. As a result, there has been a steady increase in the investments towards such programs. A comprehensive Total Rewards approach helps the employer to look beyond just monetary rewards but rather also strategically evaluate the value of their non-monetary rewards as well. A well-executed Total Rewards strategy helps not just in increasing employee productivity but enhancing business output as well, state employees.

Implementation

The implementation of the correct mix of reward and recognition strategies, contextual to the workforce, is necessary for any Total Rewards programs to be successful in obtaining the desired results. According to the TimesJob survey on Total Rewards around 50 percent of organizations peg the alignment of the rewards program with business objectives is of the utmost importance when it comes to rolling out such a program. It is critical for HR professionals to align the program initiatives along the lines of the business vision to ensure their rewards program viability within the organization.  As any and every Total Rewards strategy doesn’t function in isolation of itself, it should also be aligned with the company’s parallel policies on attracting, motivating and retaining talent. In addition to program alignment, effective communication between the concerned parties becomes the second most critical factor for executing a successful rewards program.  Highlighted by 25 percent of the organizations, implementation of a new program, communication becomes vital to bring various stakeholders and create a joint buy-in for the program. By communicating effectively and regularly, HR professionals can build a strong case around the need for a robust rewards program to be in place.  In addition to these, taking inputs from employees/HR/business leaders and understand employee needs (both generational preferences and other demographic differences). 

Benefits

"While compensation is critical in attracting new talent, as you move up the value chain, top performers need to be engaged and motivated in order to be retained – this is where a robust Total Rewards program creates the cutting edge differentiator for the organization." Says Nilanjan Roy, Head of Strategy, Times Business Solutions. When it comes to the impact of using such Total Rewards program, about 40 percent of the companies surveyed state the retention of an employee has been the key benefit, followed closely by engagement at 30 percent while 20 percent of the total employers said that such rewards program helps companies attract the right talent.

Moving ahead 

As companies move ahead in the current financial year, barriers like lack of a holistic awareness of the total rewards program, budget constraints, and missing leadership support will become the some of the key issues for HR professionals to overcome in order to make such programs truly successful. In parallel to this almost 45 percent of the organizations stated in the TimesJobs report the employee engagement and retention will be the biggest Total Rewards priority in 2016-17, followed by its alignment with the overall business strategy.  The report states that about 30 percent organizations are looking at improving the Total Rewards alignment with business strategies while 15 percent would focus on improving the suitability of their rewards program in order to address the changing needs and demand of a diverse workforce.  The study also revealed that nearly 87 percent employees prefer a customized compensation structure and organizations need to take that into account while designing the Total Rewards and benefits package. In relation to Baby Boomers, owing to their proximity to retirement age, gave more importance to post- retirement benefits after the in-hand salary in their compensation and benefits package. Gen X, on the other hand, prefers other benefits such as flexible work arrangements and more work-life balance. This generation is typically at a stage where they are supporting either aging parents or growing children, or both. Finally, Gen Y gives almost equal preference to retirement, medical and other benefits.  A detailed demographic analysis of demands needs to be mapped by companies in order to create a holistic Total Rewards strategy that is able to reach its intended results.

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Topics: Benefits & Rewards, Employee Engagement

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