There is bountiful evidence proving that rewards and incentives are one of the best workplace benefits that can boost employee engagement and productivity. Also, having a rewards program at the workplace gives the organization a competitive edge in the market, which helps with better employee retention rates and lower turnover costs. In short, rewards and incentive programs have and must become an integral part of any company’s development strategy.
The Ideal Total Rewards Program
An ideal Total Rewards program is an employee benefits system implemented by the HR departments of organizations. Through these programs, employers strategize to offer monetary and beneficial rewards and incentives to employees, upon achieving certain business goals. Depending on the company policies, it may also include compensation and other non-monetary perks for personal growth and development.
In short, the primary aim of the Total Rewards programs is to enhance employee engagement, experience, and satisfaction at the workplace, by remunerating their hard work and achievements.
According to the WorldatWork Total Rewards Model, 5 key areas make up an ideal rewards program strategy, which influences various employee wellbeing and workplace culture aspects –
- Compensation
- Employee Wellbeing
- Workplace Benefits
- Employee Development
- Acknowledgement
Compensation
Compensation is the pay which employees receive for their hard work, effort, and time they put towards getting their job done. And so, it obviously becomes an integral part of any rewards and incentive program. Most companies draft their employee compensation depending on the market trends, skills, and experience of the employees. Despite claiming to be following the current market trends, almost 64% of the employees believe that their compensation pay is much lesser than the market price. To avoid such chaos, employers must have a clear and transparent compensation policy that is in line with the legal regulations too.
Employee Health and Wellbeing
Employee health and wellbeing is one of the key objectives of all corporate wellness programs. Similarly, it is also one of the key pillars of the rewards and incentives programs. In the past few years, employers have prioritized employee wellbeing, and the COVID-19 has thrown the spotlight on how important it is to have a healthy life and work-life balance. An HR Drive analysis showed that only a meager 8% of employees felt that compensation was more important than work-life balance.
As a strategy to improve employee health and wellness, the rewards and incentive programs include gym memberships, free healthy meals or snacks at the workplace, health insurance, digital health solutions, and more. Making such choices not only improves holistic health, but also boosts employee engagement and productivity, while reducing absenteeism and healthcare costs.
Workplace Benefits
Like employee wellbeing, workplace benefits are also an integral, yet versatile part of an ideal reward and incentive program. Typically, workplace benefits and perks include monetary and non-monetary benefits that are offered in addition to the regular compensation package. More often, they comprise of employee health and holistic wellbeing benefits. Studies have shown that offering the right workplace benefits and perks can boost employee engagement.
A Harvard Business Review study showed that the most commonly preferred employee benefits were –
- 88% – Health Insurance
- 88% – Flexible Hours
- 80% – Extra Vacation Time
- 80% – Remote Working Options
Employee Development
Employees of today’s generation are no longer stuck with the traditional workplace benefits and rewards. Their perception of skills and expectations of benefits and perks has changed. Studies show that almost 68% of employees believe that development and training must be considered as important workplace policies. Most Millennials and Gen Z generation of employees value knowledge and skills as assets. Such employees place these factors primary parameters while choosing their employers. A study showed that 93% of employees were willing to stay longer in their old jobs if their employers invested more in their development and career-related skills.
While employees are valuing skills development and training as key wellbeing factors, employers are yet to focus on these aspects. Although many rewards and incentive programs include self-development and training modules, they do not emphasize much on their importance, which becomes a reason for the employees quitting their jobs for better opportunities. And so, it is apparent that in addition to investing in employee health and wellbeing, employers must also focus on employee engagement strategies that reduce turnover rates and boost productivity.
Acknowledgement
Acknowledging one’s effort and hard work motivates them to work better. The Total Rewards Strategy must also include employee acknowledgment as one of the key pillars driving workplace wellness. When employees are recognized for their skills, efforts, and outcomes, there is an evident increase in employee productivity, retention, presenteeism, engagement, and loyalty towards the workplace. Like workplace benefits, employee acknowledgment rewards also include monetary and non-monetary perks. Employers can set the rewards and incentives based on the company culture, employee behavior, and other factors.
Planning a Total Rewards program strategy is quite a comprehensive and daunting task as it involves a lot of research, seeking employee feedback to know their interests, adhering to company policies, and a lot more. While finding the right formula is the key to planning the rewards program, employers must also consult with the internal workplace teams to ensure a successful Total Rewards Program.