Overview: The concept of total rewards represents the complete compensation, incentives, development and employee benefit programs offered to employees. HR should lead the development and implementation of a total rewards strategy, which integrates business goals and organizational values. Total rewards initiatives assist in meeting recruiting and hiring goals, as well as decreasing overall employee turnover.
Chief components of a total rewards initiative include an employer's investment in the following:
Trends: Today's global business climate, featuring a sharp rise in mergers, acquisitions and corporate restructurings in some sectors, can have a significant impact on any existing total rewards programs. In addition, any potential changes regarding the taxation of components of a total rewards strategy, including the imposition of new taxes on benefits, could decrease employee rewards packages. In the event of any such internally- or externally-driven changes to total rewards programs, HR should undertake proactive employee communications strategies when discussing alterations to an employer's total rewards investments.
Marta Moakley, J.D., Legal Editor
Updated to reflect IRS guidance issued in July 2016 on the modified determination letter program.
An employer may use this form to communicate the financial value of the Total Rewards initiatives it provides to its employees, such as compensation, benefits, training and development and various perquisites in support of work-life balance. A Total Rewards Summary helps an employer enhance employee commitment and engagement.
An employer may use this survey form to determine employee priorities and preferences and to involve employees in the planning stage of a Total Rewards strategy. Involving employees in the formation of a Total Rewards strategy results in greater feelings of employee ownership of and identification with the strategy.
This section assists HR professionals in addressing both voluntary and involuntary turnover by measuring, monitoring and evaluating policies and processes that directly or indirectly affect employees' decisions to leave. Employers can diagnose, predict and control employee turnover to reduce business costs.
Attracting, motivating and retaining talent is critical to an employer's short- and long- term success. This section assists HR professionals in implementing a comprehensive, integrated total rewards strategy that can help achieve those important objectives.
Employment glossary definition of Total Rewards.
Employment glossary definition of Employer of Choice.
Employment glossary definition of Total Compensation.
HR guidance on the benefits of total rewards initiatives.