Concept of reward and total reward system
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Total rewards encompass all compensation and benefits perceived by employees as valuable in the employment relationship, including financial and non-financial elements. The five key components of total rewards are compensation, benefits, work-life strategies, performance and recognition, and developmental and career opportunities. These elements collectively form an organization's strategy to attract, motivate, and retain employees.
Concept of reward and total reward system
- 1. Total Rewards Dr. G C Mohanta, BE, MSc(Engg), MBA, PhD(Mgt) Professor Al-Qurmoshi Institute of Business Management Hyderabad
- 2. Reward Each element of compensation and benefits, is known as reward Total rewards include everything the employee perceives to be of value resulting from employment relationship
- 3. Total Rewards Financial Non-Financial DIRECT (cash) • Salaries • Incentives • Bonuses INDIRECT (benefits) • Insurance • Holidays • Medical and health • Child care • Employee assistance JOB • Interesting work • Challenge • Responsibility • Recognition • Advancement ENVIRONMENT • Good policies and practices • Competent supervision • Congenial co-workers • Safe and healthy work environment • Fair treatment
- 4. Total Rewards All of the tools available to the employer those may be used to attract, motivate and retain employees. Total rewards include everything the employee perceives to be of value resulting from the employment relationship. There are five elements of total rewards, each of which includes programs, practices, elements & dimensions Those collectively define an organization's strategy to attract, motivate and retain employees.
- 5. Five Elements of Total Rewards These five elements are: Compensation Benefits Work-Life Performance & Recognition Developmental & Career Opportunities
- 6. Compensation, Benefits & Work-Life Compensation - Pay provided by an employer to an employee for services rendered (i.e., time, effort and skill) Benefits - Programs an employer uses to supplement the cash compensation that employees receive. - These programs are designed to protect the employee and his or her family from financial risks. Work-Life - A specific set of organizational practices, policies, programs, plus a philosophy, which actively supports efforts to help employees achieve success at both work and home. - Work-life strategies address the key intersections of the worker, his or her family, the community and the workplace.
- 7. Performance & Recognition Performance - Alignment of organizational, team and individual performance is assessed in order to understand what was accomplished, and how it was accomplished. - Performance involves the alignment effort toward the achievement of business goals and organizational success. Recognition - Acknowledges or gives special attention to employee efforts or performance. - It meets an intrinsic psychological need for appreciation and can support business strategy by reinforcing certain behaviors that contribute to organizational success. - Awards can be cash or non-cash (e.g., verbal recognition, trophies, certificates, plaques, dinners, tickets, etc.).
- 8. Developmental & Career Opportunities Developmental Opportunities A set of learning experiences designed to enhance employees’ applied skills and competencies; development engages employees to perform better and leaders to advance their organizations’ people strategies. Career Opportunities A plan for an employee to advance their own career goals and may include advancement into a more responsible position in an organization. The organization supports career opportunities internally so that talented employees are deployed in positions that enable them to deliver their greatest value to their organization.