The Impact of Effective Communication on Total Rewards

Total Rewards

Effective communication of total rewards is a crucial aspect of any retention and engagement strategy for companies. While compensation is just one element in attracting and retaining employees, it is a significant one. Transparent communication about rewards helps employees understand their value within the organization and the fairness of their compensation.


Many companies still struggle to effectively communicate their compensation packages to their employees. A majority of employees feel that their companies do not explain pay programs effectively, and more than half of respondents in a recent survey said that their companies do not provide manager training on how to communicate compensation to employees. This highlights an opportunity for companies to improve their total rewards communication strategies and gain an advantage in engagement and retention.

What are total rewards?

According to Gartner, total rewards is the combination of benefits, compensation and rewards that employees receive from their organizations. 

Total rewards are a strategy that combines everything organizations give to employees–including direct and indirect compensation–when workers meet specific business goals. Direct compensation includes monetary payments, such as salary and wages. Indirect compensation involves non-cash benefits that have an indirect monetary value, like health insurance and paid leave. It can also involve perks such as flexible working schedules, career development opportunities, and recognition for their performance.

To communicate rewards effectively, there are several key considerations to keep in mind:

  1. Employees need to understand why compensation decisions were made. They should be aware of the organizational philosophy and how it aligns with compensation decisions. Showing them the reasoning behind decisions can make them feel more valued and appreciated
  2. Employees need to feel that their compensation is competitive. Providing as much information as possible about compensation packages helps them see the bigger picture and understand that they are being compensated fairly. This can aid in retention efforts because employees who feel valued and fairly compensated are less likely to leave.
  3. Transparent communication of rewards can help to prevent rumors and misinformation from spreading. When employees have all the information they need, they are less likely to speculate and gossip about their compensation.



Improving total rewards communication can lead to improved performance and commitment across an organization. HRsoft provides total rewards software, such as REWARDview, which allows for continuous communication of the full value of employment to the entire workforce. This software provides employees with simple and convenient views of personalized statements. By utilizing software such as REWARDview, companies can improve their communication of rewards and ultimately improve retention and engagement.

Accelerate employees engagement and give your employees full visibility into rewards. Contact us today to learn more.