Published: Apr 27, 2023Time to read: 4mins Category: Compensation
3 Strategies to Help Employees Understand Their Total Rewards Package
As the competition for top talent intensifies, it's essential to have a compensation philosophy and total rewards strategy that aligns with your organization's goals and values. Remote work, economic uncertainty, and changing employee priorities have all contributed to a shift in how employers are communicating about total rewards. We’ll discuss the importance of helping employees understand their total rewards package, and consider three of the best strategies to use when talking about total rewards:
1) Don’t Be Afraid to Share Your Compensation Philosophy and Total Rewards Plan
These days, it’s all about transparency. Employers who have a well-defined compensation philosophy and total rewards strategy are better equipped to retain their top talent and attract new employees. You should focus on helping employees understand the total value of their compensation package—especially as being upfront about compensation also helps employees feel more valued and respected by the organization.
Organizations should take a multi-channel approach to communicating their total rewards package to new hires and seasoned employees. It’s easy for someone to miss a singular update, so incorporating channels including emails, newsletters, intranet announcements, and meetings is a must.
When employees understand the rationale behind the organization's compensation decisions, they’re more likely to view their pay and benefits as fair and reasonable. This leads to increased job satisfaction, productivity, and retention rates.
2) Build Statements and Dashboards That Help Employees Understand the Investment You’re Making
Providing a clear and concise explanation of your total rewards package's components, such as healthcare benefits, retirement plans, and other perks, helps employees understand the value of their compensation package.
Many organizations have found that providing employees with a total rewards statement or dashboard to be one particularly effective way of achieving this. Such statements provide a clear and concise overview of the employee's compensation package, including the total amount of their compensation and benefits, taxes, and other deductions. Additionally, the total rewards statement can be customized to include other pertinent information, such as company perks and development opportunities.
And here’s another approach to consider: a personalized statement. Employees have different preferences and priorities when it comes to their total rewards. By providing a personalized total rewards statement or dashboard, employers can focus on what those employees value the most.
The right technology, such a compensation tool with robust reporting and analytics features, can be used to create interactive and user-friendly total rewards statements or dashboards. It can also be used to analyze employee data and identify trends in compensation and benefits usage, which can inform the company's total rewards strategy. Furthermore, access data for these statements and dashboards could be used to help build a picture of what users particularly connect with, helping improve what these dashboards offer over time.
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3) Stay Employee-Focused By Keeping What You Build Accessible
When creating a total rewards statement or dashboard, it's essential to keep it simple and employee-focused. Avoid using technical jargon or industry-specific terms that may confuse employees. Use visual aids such as pie charts, bar graphs, or infographics to help employees understand the breakdown of their compensation package. Make sure to include a glossary of terms so employees can easily understand the meaning of any unfamiliar terms.
Effective total rewards communication requires a thoughtful and strategic approach. Employers should remember to consider factors such as audience segmentation, message alignment, and communication channels when designing their total rewards communication strategy.
Transparent Compensation Practices Are Crucial
As the workforce continues to evolve, so too will the approach to total rewards communication. Trends like gamification, personalized content, and mobile-first communication may also be used in the near future.
Helping employees understand their total rewards package is essential for maintaining a happy, motivated, and engaged workforce. By communicating the organization's compensation philosophy and total rewards strategy, providing clear and concise total rewards statements, and keeping the information simple and employee-focused, employers can increase employee satisfaction, productivity, and retention rates.