What Are Employee Total Rewards? A Complete HR’s Guide to Implementing Them in 2023

Tony Hsieh, Former CEO of Zappos has said “Rewarding employees is about more than just salary and bonuses; it’s about creating a culture of recognition and appreciation.”

And that’s exactly why we have a little something called “Total Rewards” in Human Resources. 

This article explores the importance of rewards programs in achieving business goals, their impact on employee engagement, and key elements of effective programs.

Total Rewards

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What is Total rewards in HR

Total Rewards is an essential component of human resource management that can significantly impact an organisation’s success. By providing a wide range of incentives that complement the overall business strategy, Total Rewards programmes should seek to entice, inspire, retain, and engage employees. Effective Total Rewards programmes increase a company’s likelihood of becoming an Employer of Choice and attracting and retaining top employees.

Total Rewards is a crucial element of human resource management that has a big impact on how successful an organisation is. Whole Rewards programmes should aim to seduce, inspire, retain, and engage employees by offering a wide range of incentives that support the overall business plan. It is a holistic approach which guarantees prospective employees. The likelihood that a company will become an Employer’s Choice and recruit and keep top talent increases with effective Total Rewards programmes.

Good total compensation plans are essential for boosting corporate success because they result in motivated employees. Higher worker engagement, employee satisfaction, productivity, and retention rates can increase customer satisfaction and profitability.

Why do you need total rewards?

Businesses require total rewards since it is an essential component of human resource management. Complete Rewards can first aid organisations in luring and keeping the greatest and talented employees. Businesses can become an Employer of Choice in their field by providing employees with a competitive salary, benefits, and other non-monetary incentives by implementing a comprehensive rewards package. Potential Employees are more inclined to select a business that provides a complete Overall Rewards package that fits their requirements and preferences.

Second, Rewards to employees can raise productivity, work happiness, and employee engagement. Employees are more likely to be involved, productive, and devoted to the organisation when they feel valued and appreciated. Higher corporate performance, enhanced customer happiness, and better revenues can result from employee engagement and contentment.

Third, total rewards can assist organisations in achieving their corporate objectives. Businesses can incentivise employees to work towards reaching organisational goals by coordinating rewards programmes and company goals. A performance-based rewards programme that rewards employees for hitting or exceeding sales targets, for instance, can inspire workers to put in more effort and produce better outcomes if the company’s objective is to boost sales.

Fourth, total rewards can assist companies in minimising workforce-related risks. For instance, disability insurance can support staff in managing unanticipated circumstances and ensuring their financial stability in the event of disability. Businesses can lower the risks of employee absence due to medical difficulties by providing disability insurance.

Fifth, Complete Rewards can help businesses find and retain talent. Employee skill and knowledge growth, which can be aided via employee development programmes, can lead to increased job performance and greater job satisfaction. Businesses can use incentives programmes to recognise and elevate employees for their contributions and accomplishments, fostering a culture of performance and accountability.

In order for any organisation to succeed, total rewards is crucial. Businesses can attract and keep the finest talent, increase employee engagement and productivity, accomplish company goals, manage workforce risks, and develop and retain talent by providing a complete rewards package that is in line with the business plan. Making sure that both monetary and non-monetary benefits are included when determining employee compensation requires a holistic approach to total rewards. A productive workforce, higher business performance, and an engaged workforce are all essential for the organizational performance which in turn guarantees the success of any organisation. Effective total rewards can produce these outcomes.

How do you measure total rewards?

A key component of human resource management is total compensation measurement, which assesses how compensation affects employee performance and behaviour. Compensation impact can be assessed by examining how compensation affects employee engagement, satisfaction and retention. Employee motivation is strongly influenced by intrinsic rewards that are difficult to quantify, such as job satisfaction and a sense of accomplishment.

Non-financial Rewards : By tracking employee feedback and participation in recognition programmes, non-financial rewards like appreciation and recognition may be quantified. The number of employees who receive tangible rewards, such as bonuses and promotions, as well as their influence on job satisfaction and retention rates, can be calculated.

A well-designed Rewards Compensation Program : For companies to attract and retain top performers, their compensation programs must be well thought out. A complete compensation package should include compensation and benefits such as salary increases and health insurance. Employees may be given a payslip detailing their total remuneration and bonuses.

Position Management is another critical factor to consider when measuring total rewards. Administration for Positions, Departments with Position Control, Position Descriptions, and Position Management Process are all essential components of effective position management. A Position Management Review Request can be used to evaluate the effectiveness of position management practices.

Long-Term and Short-Term Incentives : The effects of rewards on employee performance and behaviour can also be evaluated using long-term and short-term incentives. Long-Term Incentive Compensation can aid in the retention of top performers, while an effective sales incentive programme can inspire sales personnel to produce higher outcomes.

When determining overall remuneration, human resources should be properly taken into account. Companies should routinely evaluate the efficiency of their current offerings and how they affect productivity and morale among staff members. Good internal communication is crucial to maintaining employee motivation and awareness of advantages.

In conclusion, calculating total rewards is crucial for assessing their influence on worker performance and behaviour. When evaluating the success of rewards programmes, non-financial rewards, tangible rewards, and intrinsic rewards should all be taken into account. Other crucial elements to take into account are compensation & benefits, position management, and incentive programmes. In assessing and conveying to employees the value of rewards, human resources are crucial.

How to create a Winning Total Rewards Strategy (a step-by-step guide)

Total Rewards Strategy

Here are the steps to create a winning total rewards strategy:

  1. Establish your company’s goals and the personnel needed to attain them.
  2. To find areas for improvement and gaps, analyse salary and benefits.
  3. To make sure your plan fulfils their expectations, gather information on the demographics, preferences, and needs of your employees.
  4. Create a budget for your whole rewards programme and make sure it supports your corporate goals.
  5. Create a comprehensive rewards programme that offers both monetary and non-monetary prizes.
  6. To accommodate your employees’ various needs, think about offering flexible benefits.
  7. Make sure your employees understand your complete incentives approach so they can appreciate the benefits of the programme.
  8. To keep it competitive and pertinent to the demands of your employees, always examine and improve your whole incentives approach.
  9. By analysing employee engagement, retention rates, and overall company performance, you can gauge the success of your total rewards approach.
  10. To make sure your plan is in line with industry best practises, think about getting expert advice from a human resources consultant.

What to keep in mind while framing a Total Rewards Strategy?

Total Rewards Strategy

A effective total rewards strategy should take a holistic approach, accounting for all reward components, including pay, benefits, incentives, employee growth, and work-life balance. This will guarantee that the compensation package is both competitive and appealing to employees. Also, ensuring that awards support the company’s mission and vision will be made easier by coordinating the whole rewards plan with the business goals and objectives of the organisation. To maintain competitiveness, handle changes in the labour market, employee expectations, and organisational goals, it is crucial to regularly examine and modify the whole incentives plan. This will make it easier to keep up a rewarding compensation plan that draws and keeps exceptional workers. The following is a list of the three key considerations: –

  1. Consider the holistic approach: To design a competitive and compelling employee benefits package, a complete compensation strategy should take a holistic approach and consider multiple aspects of compensation such as: Compensation, Benefits, Incentives, Employee Development, and Work-Life Balance.
  2. Align with business goals: To ensure that awards support the organisation’s mission and vision, a successful total rewards strategy should be in line with its business goals and objectives.
  3. Regularly review and adjust: It’s critical to continually assess and modify the whole rewards plan to keep it working. The incentives programme will remain competitive and appealing while addressing changes in the labour market, employee expectations, and organisational goals..

How to Implement Human Resources Total Rewards

It takes careful planning and execution to implement a human resources total rewards programme successfully. These are some actions to think about:

Develop a comprehensive rewards strategy: Start by taking a holistic approach to rewards and listing its many components, such as pay, benefits, incentives, employee growth, wellness initiatives, and work-life balance. When creating the rewards package, take into account the organizational goals and commercial strategy.

Communicate with employees: Ensure that staff members are knowledgeable of the new rewards programme and its advantages. Utilize a variety of communication methods to explain the programme to employees and answer any queries or worries they might have.

Implement the rewards program: The rewards programme will be developed and implemented in stages. Introduce other components like incentive programmes and staff development programmes after the most crucial ones, such as base pay and benefits, have been covered.

Regularly review and adjust: Regularly examine the incentives programme and make any required adjustments to ensure its effectiveness. The rewards programme will remain competitive and alluring while addressing changes in the labour market, employee expectations, and organizational goals.

Measure the impact of rewards:Regularly assessing the rewards program’s success is crucial. Check the rewards program’s success using indicators like employee engagement, retention rates, and productivity.

Work with human resources: In order to execute and manage the total rewards programme, human resources are essential. They can assist with the program’s design, employee communications, and impact evaluation. Make sure they have the tools they need to perform their duties successfully.

Implementing a human resources total rewards program requires careful planning of the reward strategy, Competitive compensation, effective communication, and continuous review and adjustment of compensation philosophy. By following these steps, organisations can create an attractive and competitive rewards package that motivates and engages employees.


Total incentives in HR refers to the advantages and pay that employees receive in exchange for their labour. To draw and keep outstanding personnel, it’s critical to have a rewards strategy that incorporates different types of reward such as incentives programmes, a rewards package, retirement plans, and disability insurance. Employee performance and engagement can be raised by taking a comprehensive approach to rewards that takes into account both intrinsic and material benefits.

Rewards programmes that encourage an engaged staff and are in line with corporate objectives should be available from a top employer. This can be accomplished with the aid of incentive pay plans that provide base salary increases and conventional compensation. These programmes must be successfully managed, with position management procedures and descriptions, and clearly communicated through salary statements.

Employee engagement and happiness can also be positively impacted by non-cash compensation including vacation time, flexible scheduling, and wellness initiatives. Effective sales incentive programmes, as well as long- and short-term rewards, can support business performance.

The timing of termination and the administration of awards should be taken into account while thinking about incentive programmes. Furthermore, knowing the labour market and what is currently available will assist HR managers in making wise decisions regarding pay and benefits.

In general, a well-designed compensation system helps develop productive teams and establish a company as a preferred employer. Internal communication and employee development programs are also essential to making sure employees feel valued and invested in the company’s success.

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