4 Key Elements of a Total Rewards Plan
While researching how compensation and benefits operate today, we realised that the definition of job satisfaction has significantly evolved over the generations. If we talk about the first generation of employees in India after freedom was achieved, they were more focused on building financial security for their families. For them, ‘monetary fulfilment’ was a priority over anything else. This led to the following generation having the advantage of financially secure backgrounds, so ‘monetary abundance’ became their operating mechanism. They emphasised more on uplifting their standards of living. Now, given the efforts of the previous generations, our current generation steps beyond the boundaries of monetary restrictions to define job satisfaction. And hence, there is a need for Total Rewards 2.0 Plan that combines all financial, non-financial and developmental benefits into one package to attract and retain top talent at your organisation.
To be more precise, let’s talk about some concrete figures that would confirm how the total rewards economy has been changing in the current times to adopt a more comprehensive and holistic nature.
- A survey conducted by AttaCoin validates the theory that total rewards should be a balance of monetary and non-monetary initiatives. In the survey results, only 36% of employees agreed that money is the best way to deliver work appreciation.
- Also, survey results have revealed that a quality rewards program helps employees understand that their work matters. In a Survey, 90% of employees of an organisation with an effective rewards plan felt that their work adds value to the organisation as compared to 64% of employees of an organisation that lacked the presence of a rewards program.
- Figures have also shown that non-cash rewards leave a long-lasting impression on your employees. Resultingly, approximately 65% of surveyed employees feel that travel incentives and merchandise awards are more memorable than traditional monetary rewards.
Going ahead in this blog, we’ll talk about the various elements of total rewards and how you can implement an effective rewards and benefits program for your business.
Elements of a Total Rewards Plan
Primarily, there are 4 main elements of a total rewards plan. Given the nature of rewards, they can either be mandatory or non-mandatory:
As per standard norms, cash wages constitute more than 70% of the total rewards plan. So, it obviously has a strong influence on the attraction and retention of talent towards your organisation.
If you consider the current trends, more often than not, candidates are inclined to overlook job postings that need to have information on salary or salary ranges. In fact, a survey conducted by Workable mentions that approximately 63.4% of employees surveyed look for new opportunities because they want to make more money.
When an employee is paid right, it gives them a sense of job satisfaction that motivates them to be more productive and performance-oriented.
If you look at it from a monetary perspective, investing in professional development programs might not seem a financially sound move, but the benefits of including them in your total rewards program are numerous.
– Professional development plans are directly proportional to performance improvement. In the current world, there is a persistent onslaught of new learnings and insights. With these career development programs, you can make sure that your employees constantly upskill themselves and stay competitive in their respective roles.
– The employees understand that by constantly upskilling themselves through these courses, they are essentially increasing their professional value in the job market. This makes your employees appreciative of the initiatives you have taken and hence improves their work productivity.
– Career development programs also help people in leadership roles understand their team members’ weaknesses and strengths. They can schedule discussions around these development programs and keep a track of an employee’s progress through it all. This assessment will also allow them to create fair appraisal plans in the long run.
Recognition and Bonuses
As a professional, acknowledgement and appreciation can prove crucial in engaging your employees. Recognition and bonuses, as a result, act as a strong catalyst in enhancing employee productivity.
While there are numerous types of bonuses available out there, performance-related pay has a strong positive impact on your employee performance. In fact, a recent survey conducted by the Harvard Business Review revealed that performance-related pay has a crucial role in escalating job satisfaction, loyalty and dedication towards the organisation.
We all know that calling today’s world fast-paced is gradually turning into an understatement. As such, maintaining a healthy work-life balance for your employees should be a priority as an organisation so that your talent pool does not crumble under the pressure of being burnt out.
As mentioned in a Survey, around 72% of professionals take into consideration work-life balance when looking for new opportunities. Moreover, 77% of full-time professionals confessed that they have experienced burnout during their jobs.
So, it is time that you integrate work-life balance incentives into your total rewards program to help your employees lead a healthy professional life.
Now we understand that creating a holistic total rewards strategy is essential for organisations to attract, engage, and retain top talent. Such a strategy must go beyond offering competitive compensation and benefits packages and take into account the changing needs and expectations of employees. In today’s world, employees are looking for more than just financial security, and factors like professional development, recognition, and work-life balance are becoming increasingly important in defining job satisfaction. By investing in a total rewards plan, organisations can create a culture of success that benefits everyone involved.
HireSure.ai understands how the total rewards economy has been changing in current times. Keeping that into consideration, we have created a real-time compensation dashboard that keeps you updated with the industry benchmarks in compensation, market fluctuations, and the current trends in the total rewards landscape to help you create a wholesome and fair total rewards plan for your employees.