Developing Your Employee Rewards Strategy

Photo by Alexander Suhorucov:

If the pandemic has taught organizations anything, it’s that a top pay and benefits package is not enough to lure and retain employees. With traditional workplace models turned on their heads, it’s time to reimagine that employee rewards strategy. After all, employees have more say in terms of how they want their work lives, and it’s a fact that, overall, happy employees result in happy customers. 

With all that said, here’s what you should know about developing your employee rewards strategy.

The Issue

No longer can you count on a sweet pay and benefits package to recruit and keep employees. The other side of that is, if employees or job candidates see that you value them enough to offer other goodies, they’ll work their hardest for you.

Consequently, companies are looking anew at their employee rewards strategy while baking in the agility that’s needed in this still-evolving business climate. You also must base your reshaping on data and analytics. Otherwise, you’re just guessing.

Explain Total Rewards Strategy

It’s a kind of pay and benefits system that consists of monetary and other types of rewards, such as opportunities for professional growth and development, as a means of motivating employees to remain engaged and productive. 

Many companies provide a total rewards package to acknowledge and award people and teams who meet certain goals or milestones. 

What’s the Big Deal About Total Rewards?

The overarching goal is to make sure that every employee has the best combination of monetary and non-monetary rewards to get them to perform as the company desires, AND to stay with the organization.

Let’s break down the advantages of a total rewards approach:

  • Improved recruitment. Once you’ve crafted and assigned a value to your total rewards package, you can offer it to potential candidates. While everyone has different priorities, you can feel good about the package you’ve put together. 
  • Improved retention. When an employee sees that you’re open to going beyond the norm for them, and we mean more than pay here, you’ll likely end up with a satisfied workforce, more engagement, and better retention.
  • Better performance and productivity. There’s proof galore that good total rewards programs are linked to improved employee performance and satisfaction overall. Happy employees are simply more productive.
  • Increased awareness of total rewards. So many employee benefits go underused because employees either are unaware of them or have forgotten about them. Establishing a total rewards program affords you a new opportunity to inform employees of everything that’s available to them.

What Makes for an Effective Rewards Strategy?

As mentioned above, the best rewards strategies are built from data and analytics, something the leading consultant Mercer, for example, knows all too well. In fact, Mercer helps organizations attract, retain, and engage their workforce by:

  • Establishing a total rewards strategy. Mercer employs analytics for total rewards to assess your workforce, close skills gaps, gauge employee sentiment, uncover workforce segments that have distinct needs and values, and improve engagement and retention. This removes all guesswork and any subconscious bias.
  • Building agility. The ability to pivot is paramount in today’s business environment. To accommodate this need, Mercer establishes a skills-enabled career framework that links vital HR processes. With a job architecture that aligns pay and benefits with career trajectories, positions, and labor markets, organizations can change course as needed.
  • Optimizing return on investment. With the various work models now including remote, flexible, and digital, you can use your rewards strategy to boost organizational flexibility and inclusion. You can also enhance your workforce adaptability and performance, while simultaneously optimizing allocation and return on incentive investments.

Ultimately, developing your employee rewards strategy requires you to fully understand that the days when a solid pay and benefits package was enough to attract and retain most employees are over. It’s a new ballgame, and organizations must be creative – based on data – to win employees over. If you need help with your strategy, we do recommend the consultant Mercer.