Developing an effective total reward strategy

TOTAL REWARD

Developing an effective total reward strategy

It is an incontrovertible fact that the concept of total reward is rapidly moving up the reward agenda. But despite gaining acceptance among many enlightened organisations, questions about how to define this approach, what to call it and how best to apply it remain unsolved. A report published in a recent edition of WorldatWork Journal aims to tackle these questions and clarify the confusion.

This nine-page report identifies the main sources of confusion in the marketplace, highlights the primary causes of chaos within organisations that are implementing a total reward approach and concludes with a roadmap for organisations.

Sources of confusion

The authors of the study, Richard Kantor and Tina Kao, who are consultants at Hewitt Associates in the US, point out that there is no generally accepted definition of total reward and the term is used by practitioners and researchers to describe a range of reward methods. What's more, consultants have formulated a range of models to depict total reward. And because organisations often choose a huge array of different elements to include in their total reward programmes, there is a tendency to apply different terms -- everything from total compensation to employers value proposition, and employers brand to total rewards.

Chaos within organisations

As Kantor and Kao explain, the attractions of total reward appear compelling but there are some formidable stumbling blocks when it comes to implementation and administration. So, why is total reward not always a resounding success? Because, too often, there is disagreement among managers on the usefulness of total reward, strategies are generic, vague and meaningless, and communication is poor and ineffective at most companies.

Golden rules for total reward

So, how can organisations get the most from their total reward programmes? Kantor and Kao conclude with their golden rules to help you develop an effective total reward strategy:

• Define total reward broadly to encompass everything "an employee gets as a result of working for the company". As Kantor and Kao put it: "Conveying the total value of the work experience is always more compelling to employees."
• Clarify the business direction so that your total reward strategy is aligned to the business vision.
• Communicate with quality, not quantity, so your focus is on "delivering targeted rewards information to employees that is accessible, current and meaningful".

Want to know more?

Title: "Total rewards", by Richard Kantor and Tina Kao, WorldatWork Journal, thirds quarter 2004.

Availability: To subscribe to the quarterly WorldatWork Journal contact WorldatWork, 14040 N. Northsight Blvd, Scottsdale, Arizona, USA AZ 85260, tel: 001 480 951 9191 or email: worldatworkjournal@worldatwork.org

WorldatWork, formerly the American Compensation Association, is one of the HR professions oldest and most distinguished bodies. Founded in 1955, it is "dedicated to knowledge leadership in compensation, benefits and total rewards". WorldatWork is a not-for-profit association with a membership of more than 25,000 human resource professionals, consultants, educators and others, primarily in the United States and Canada.

For further details about WorldatWork visit www.worldatwork.org

Posted 21 January 2005