How to Balance Theory & Practice for Effective Total Rewards Communication

How to Balance Theory & Practice for Effective Total Rewards Communication

Oftentimes, managers focus primarily – or entirely – on practice when communicating rewards. In other words, we tend to discuss the mechanical aspects of compensation (how to use it, etc.) and not so much on the rewards philosophy. Here, we take a look at why balancing these two elements is so critical to building an effective total rewards communication plan.

To further illustrate what we mean by theory and practice, here’s a brief review:

  • Theory: the rationale behind why we do what we do
  • Practice: how we do what we do

Rewards Philosophy (Theory)

The “why” behind your rewards program should be based in the rewards philosophy; which should be based on the HR philosophy which, in turn, should be based in the organizational philosophy. The philosophy acts as the guide that frames program objectives.

One important thing to consider when it comes to your rewards philosophy is that it’s paramount that all managers have a thorough understanding of it. Managers will ultimately be the people communicating about total rewards with their employees, so it’s crucial that they have ample training to form a complete understanding of the rewards philosophy. That way, they act as the bridge between the company and the employee, and they can also answer any questions that their team may have directly.

Mechanics (Practice)

As you already know, there’s a lot to communicate when it comes to the mechanics aspect of total rewards. Here are just a few things that you’re probably already focusing on:

  • Base Pay Plans
  • Incentive Plans
  • Benefit Plans
  • Total Rewards Statements
  • Changes to Benefits, Incentive, or Base Pay

And of course, there’s probably much more beyond what’s listed above specific to your company.


Striking a Balance

The theory/practice ratio that you use to communicate will ultimately depend on your organization’s needs, existing practices, and culture. Depending on the context of the communication, it can vary tremendously. For instance, if you are training HR managers on compensation, communication could be 80% theory and 20% practice.

More important than determining an exact ratio is making sure that you have some of each. When it comes to communicating rewards, the theory behind your compensation decisions gives value to the practices themselves, and vice versa.


HRsoft is a leading provider of strategic talent management software that improves manager effectiveness and business results. Our full suite of cloud-based HR software solutions includes applicant tracking software, compensation planning software, total rewards software, stay interview software, performance management software, and content management software. For more information on our Total Rewards Software, REWARDview, click the button below!

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