Total Rewards Strategy Differentiates Organizations From Competitors
March 2 2023 - Talent attraction and retention are critical organizational functions in a competitve jobs market. HR Advisory Firm McLean & Company has published a holistic blueprint entitled Build a Total Rewards Strategy which goes beyond traditional categories of compensation, such as base pay and employee benefits, to include:
Wellbeing - employees' overall happiness within and outside work
- Development - of knowledge, skills, and attributes
- Recognition - "acknowledgement by the organization and employees of the demonstration of desirable behaviors."
McLean & Company contend that few organizations have a holistic Total Rewards (TR) strategy and they often fail to appreciate which elements are valued by employees and affect organizational success.
Will Howard, director, HR research & advisory services at McLean & Company said:
"A Total Rewards approach focused solely on compensation and benefits no longer captures the full extent of what employees value, nor is it flexible enough to adapt to the current labor market. Regardless of how extensive an organization's Total Rewards offerings are, they will have little to no impact if they are designed without the unique aspects of your employee population in mind and are not perceived as meaningful."
McLean & Company have recommended four key steps to build a Total Rewards roadmap over three- to five-years:
- Plan and define goals - Step one requires:
Once completed, HR leaders can create an inventory of their current TR offerings, review and analyze existing organizational data together with additional data from employees on TR offerings.
- establishing a Total Reward project team
- reviewing strategic documents and uncovering key takeaways
- scanning the external competitive environment
- Determine cost optimization initiatives - The second step includes:
After this step HR leaders need to consult with Finance and HR stakeholders to "determine budgetary and resourcing constraints and prioritize strategic projects based on estimated effort and potential impact."
- leveraging key takeaways from step one to identify present and ideal states for each Total Rewards category
- spotting the gaps between current and ideal states, and
- brainstorming strategic projects to address those gaps
- Prepare an action plan - The third step involves:
- gathering information to assess prioritized strategic projects
- examining individual strategic projects against constraints of organizational resources
- prioritizing strategic projects into a final list.
- Build a TR strategy roadmap - Step four asks for defined goals and metrics for each of the strategic projects on the finalized list together with developing a business case to get senior leaders to buy-in. With completed business case and clearly defined objectives, HR leaders can draft:
an overarching TR purpose statement
- an action plan, and the necessary associated communications
- an evaluation and iteration process for the TR strategy.
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