15 May Why Is It So Important to Communicate Total Rewards?
Communicating total rewards is an important aspect of any retention and engagement strategy. While compensation may indeed only be one piece of what works to attract and retain employees, it is quite a significant piece. piece. In order for employees to understand their value in the organization and the fairness with which you’re compensating them, you must become transparent about rewards. Here are a few more things to consideration about communicating rewards:
Communicating the “Why” Behind Compensation
One aspect of communicating total rewards to employees is enabling them to see the reasons behind why compensation decisions were made. Employees should be able to understand the organizational philosophy, and how that fits into compensation decisions. Showing them why decisions were made will allow them to feel more valued.
In addition to feeling valued within the organization, employees must also feel that the compensation is competitive. When you present as much information to them as possible, they’ll be able to see the “big picture,” instead of just a few small pieces. This can aid in retention efforts, because employees who feel that they are being compensated fairly know they are valued fairly and are less likely to leave.
The more information you present to employees, the less likely it will be for them to breed misinformation and gossip. When everything is laid out on the table, it reduces the odds that rumors surrounding compensation will be spread.
Employees are Dissatisfied
According to recent data, many companies could be doing a better job of communicating compensation to their employees. Here are some statistics to consider:
- More than half (52%) of employees feel that their company does not explain pay programs effectively (source: Towers Watson Global Workforce and Global Talent Management and Rewards Study, 2014)
- 53% of respondents in a Payscale survey said that their company does not provide manager training on how to communicate compensation to employees (source: Payscale Compensation Survey, 2014)
- 29% of employees surveyed by WorldatWork feel that pay communication needs the most improvement out of all components of their company’s rewards program (source: WorldatWork, 2007)
As you can see, there’s an opportunity for forward-thinking organizations to improve their total rewards communications strategies and outperform competitors in the areas of engagement and retention as a result. Plus, the advantages of improving your total rewards communications are far-reaching: you can expect to see improved performance and commitment across your organization as well!
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!