Running head: TOTAL REWARDS Total Rewards: Strategically Achieving Business Results Strayer University Abstract Total Rewards reflects what employees’ value from its employer. It focuses on five elements that attract, motivate, and retain the talent to achieve business goals. These elements are: Compensation, Benefits, Work- Life, Performance and Recognition and Development and Career Opportunities (WorldatWork, 2007, p. 4).
This paper describes the five advantages of a total rewards approach, five ways a total rewards strategy can go astray, six steps involved in the design of a total rewards program and eight steps involved in the communication process of a total reward program (WorldatWork, 2007, p. 15-64). Finally, the paper will summarize the components and the results of an effective design, implementation and communication strategy and result of a successful total rewards program. Total Rewards: Integrative Elements to Achieve Business Results Five Advantages One advantage of a total reward package is increased flexibility.
Flexibility allows business’ to develop programs that cater to the needs of its employee by combining transactional and relational awards, allowing the reward package to meet the different emotional and motivational rewards of employees (WorldatWork, 2007, p. 15). Improved recruitment and retention is another advantage. Highly skills employees are in demand and, companies must find ways to attract and retain high performers. A comprehensive rewards package highlights the organization’s commitment by showing the total value of the reward package.
This commitment provides a competitive advantage to prospective employees as well as those employees contemplating leaving the organization (WorldatWork, 2007, p. 16). Total rewards help reduce labor costs and the cost of turnover by promoting employee engagement and reaffirming trust within the organization. Employees, who feel valued and engaged develop a sense of loyalty which increases retention and reduces the cost of turnover. This approach also heightens the organization’s visibility in a tight labor market (WorldatWork, 2007, p. 16).
Comprehensive rewards programs attract employees looking for organizations whose environment aligns with their personal needs and values (WorldatWork, 2007, p. 16). These programs also enhance profitability. There is a misconception that converting to a total rewards approach is an expensive investment; however, total rewards offers remixing rewards as a cost effective alternative that helps improve the employee’s perception of values without increasing the organization’s investment, by reallocating funds to better meet the overall business needs (WorldatWork, 2007, p. 7). Five Ways to Go Astray Total rewards strategies can go astray if the organization tries to reengineer the program in pieces. An organization must look at the entire program; making sure all the programs work together to deliver optimal business results. When organizations implement changes all at once, it can cause the program to go off course. There must be a period of transition for managers and employees to learn the new plan. It is best to implement changes in increments over time (WorldatWork, 2007, p. 19).
Stakeholders should be involved in the strategic process, identifying all the needs throughout the organization. Input from a broad scope of people can uncover elements that may not be identified by a narrower representation of staff (WorldatWork, 2007, p. 19). An impact analysis also uncovers information that can reveal how the plan will perform during different phases of the business life cycle. Organizations that do not perform this process risk the program’s success. (WorldatWork, 2007, p. 19). Ineffective communication can contribute to a program’s demise.
Proper communication is critical to any program’s success. Employers must identify the right amount information necessary for a specific audience, time to deliver the message and format for delivery (WorldatWork, 2007, p. 19). Six Steps in Designing Analyzing and assessing the current strategy and plan is the first step in the design process. The organization must look at the current rewards, and assess the rewards mix and its effectiveness (WorldatWork, 2007, p. 28). Next step is establishing a total reward strategy that links to the organizational goals, culture, and change efforts (WorldatWork, 2007, p. 2). Once the strategy has been identified, developing an effective rewards strategy requires determining the purpose and scope of the program, eligibility of individuals in specifics aspects of the program, a baseline for measurement and goals, funding for the program, selection and structure of the plan and the timeline for implementation (WorldatWork, 2007, p. 35). After plan development, the action begins– implementation. This involves obtaining management approval, forming an implementation team and conducting pilot test of the plan, before communicating to the entire organization (WorldatWork, 2007, p. 9-40). Once the plan is implemented, communication begins by educating employees on the plan and showing how it links to the overall business strategy. This step helps set the plan expectations and aids in the employee understanding of a total rewards package. The information allows employees to make better career choices and confirms the organization’s commitment, which builds trust and loyalty (WorldatWork, 2007, p. 40). Evaluation and revision is the final step of the process. Evaluations allow organizations to see how the program is working.
An effective program should show measurable results in motivation, recruitment and retention that satisfy a broad range of the employees. Organizations should review quantitative and qualitative measures to determine the success of the program. This step is ongoing and allows organizations to make plan adjustments to maintain the integrity of plan, as industry trends changes (WorldatWork, 2007, p. 46-48). Eight Steps in the Communication Process The first step in process is analyzing the situation, which is identifying specific changes that must be communicated.
Second, define the program’s objectives. This ensures that the objectives are specific, measureable, attainable, audience specific, relevant and tied to the business goals (WorldatWork, 2007, p. 58). Third, conduct audience research to determine how your message should target a specific group. Fourth, determine the key message. This links the content and the objective. Fifth is selecting communication channels; these can include written, electronic, and verbal mediums. Next, develop a communication campaign which documents all data collected and decisions made up to this point.
Once the campaign’s plan is developed, implementation begins. Implementation focuses on who needs to know the message at specific stages; it builds interest in the message, develops the theme of the message and determines how the message links to the organization culture and goals. Evaluation of the process is the final step. Feedback from employees about the communication process is a critical element in the plan which can be performed through questionnaires, focus groups or interviews conducted by human resources (WorldatWork, 2007, p. 58-64).
In summary, the advantages, design, and communication, as well as understanding how reward systems can go astray decide the program’s success. Developing a reward program that uniquely links the employee values to organizational goals, can offer a competitive advantage that cannot be duplicated. The success of any total rewards program is “a satisfied, engaged, and productive group of employees who, in turn create the desired business performance and results” (WorldatWork, 2007, p. 86). References WorldatWork. (2007). The WorldatWork Handbook of Compensation, Benefits, & Total Rewards. Hoboken, New Jersey: John Wiley & Sons, Inc.