STIs/Bonuses, Benefits, & LTIs: Making Them Work for Your Total Rewards Program

STIs/Bonuses, Benefits, & LTIs: Making Them Work for Your Total Rewards Program

While base pay is typically considered the most important component of compensation as it is the largest cost, other elements of total rewards deserve consideration as well. STIs/bonuses, benefits, and LTIs can be used to enforce clarity, support the company strategy, and encourage positive employee behaviors. Take a look at how each of these elements can factor into your overall design below.


The options for short-term incentives (STIs), also referred to as bonuses, are virtually endless. For example, they can be given to individuals or teams, monetary or non-monetary, and can even be paid at different payout frequencies. Some examples of bonuses are annual, merit, performance, signing, gain sharing, and profit sharing. To determine the best types and payout frequencies for bonuses, employers should look at cash flow patterns in their businesses.

Regardless of which types of STIs and bonuses are chosen, employers must be aware of favouritism or abuse, especially with nomination-based awards. Consistency must be maintained, and targets should be set clearly to avoid confusion and allow employees to understand exactly what is expected. One effective way to determine whether bonuses are working as intended is to ask for employee input via internal surveys.


Like bonuses, employers have many options when it comes to employee benefits. Companies can choose to offer fixed versus flexible plans. To combat the cost of benefits, some employers are giving their employees flexible spending accounts for health and wellness.

There is no right or wrong way to approach benefits; instead, these decisions come down to the employee value proposition the company wishes to set forth. Additionally, any decisions on employee benefits should be made with longevity in mind. When benefits have to be revoked, it can have a negative impact on company culture and employee engagement.

To ensure ongoing success, employers should be reviewing benefits regularly, along with vendors, to ensure they are maximizing the value of their total rewards programs. They can monitor premiums, claims processing fees, and usage, and make changes as needed. Additionally, it is essential to verify that benefits providers have the right infrastructure in place to support employee confidentiality.

Lastly, many companies are encouraging self-service benefits management as a way to ease the administrative burden on HR and give employees a sense of autonomy in managing their benefits. By providing employees with the benefits information they need at their fingertips, employers can cultivate a more engaging experience for employees and streamline many processes for added convenience for both parties.

Long-Term Incentives

Like bonuses and benefits, long-term incentives (LTIs) are also encompassed by total rewards. LTIs should be closely monitored by compensation professionals, as they can become a high financial burden. Incentives such as group saving plans and stocks and options are favored among many employees. While employers can use these offerings to incentivize long-term commitment with the company, there are a few considerations they should keep in mind to control costs.

For one thing, employers can limit eligibility by putting the proper terms and conditions in place. Employers should be mindful of vesting periods, blackout periods, and withdrawal/transfer restrictions. To protect the interests of the company, it is recommended that employers work with a reliable trust company and banking partner that can help to successfully oversee long-term incentive programs.


HRsoft is the industry leader for compensation planning and total rewards software. Our cloud based SaaS solutions combine best of breed features with an intuitive, easy-to-use interface that simplifies and automates the entire compensation process helping companies save time and their best employees.

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