20 Apr What Are the Components of a Total Rewards System?
Managers and executives know that to retain high performers, they need to offer a competitive salary that adequately reflects the business climate of their industry. But what else can you offer as incentives to keep talented individuals on board? Here, we examine the components of a total rewards system which you can implement in your organization:
- Compensation: Of course, this includes base salary, but there are also other factors you can consider working into your pay system, such as short-term or long-term incentive pay. Both work well to attract and continually motivate top performers who are confident in their abilities to exceed expectations, according to Ameriprise Financial writer Kevin Johnston.
- Recognition: Employees need to feel that their hard work is appreciated and critical to your company’s ability to achieve goals. contributing editor Jeff Haden recommends creating a “recognition culture” in which management routinely provides specific, genuine, and timely feedback.
- Benefits: Just as a refresher, your benefits package should include leave of absence, sick and bereavement leave, and vacation time. Of course, it will also include the legally-mandated minimum requirements such as Medicare, unemployment, and Social Security. Offering an attractive benefit package can help set you apart from competitors and round out your total rewards system.
- Work/Life Balance: More than half of U.S. employees feel overworked, and 28% feel this way often or very often. Your ability to help employees create a manageable workflow and strike a healthy balance between the demands of work and other personal responsibilities is critical to keeping your people happy. Try to be as flexible as possible to accommodate for employees who may have irregular schedules due to family demands. You can also offer counseling to help employees plan for retirement, and provide thorough overviews for investment options.
- Development: Lack of development opportunities is the number-one reason employees leave their jobs. Don’t let that be the reason your best talent leaves. Offer career development opportunities tailored to your employees’ goals for growth, and be sure to provide the resources they need, such as access to training and courses.
When you focus on each of the components listed above, you’ll not only retain employees, but you’ll also motivate and engage your workforce as well.
For more information, our white paper, Designing Pay Plans for Desired Results, reviews the main components of a well-rounded total rewards package.
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