The WorldatWork Handbook of Compensation, Benefits & Total Rewards: A Comprehensive Guide for HR Professionals

Chapter 3. Developing a Total Rewards Strategy

While many companies agree with the idea of total rewards, they often don’t actually put a total rewards strategy into practice. The compensation department may design a sales force compensation program separately from the benefits department that revises the 401(k) program. This piecemeal approach is common, but it’s akin to building a state-of-the-art skyscraper on top of the foundation of a 30-year-old, mid-rise office building. That skyscraper isn’t going to be structurally sound using a base that wasn’t designed to support it. The same thing can happen when new or revised benefits are built without regard to the overall compensation and benefits structure.

The Total Rewards Blueprint

Starting a total rewards program off on the right foot is a matter of taking a complete inventory of the programs already in place, ranking each program’s effectiveness and finding the linkages between the rewards and the business strategy.

• Inventory. Find out what’s already in the mix—every program, plan, and perk, even those not currently in use.

• Rank. Determine the effectiveness of each program and how close it is to being a best practice in the industry. Effectiveness can be defined several ways. For instance, low participation can mean low interest, or possibly low understanding of a particular program. Ask line managers to list the top five and bottom five programs in the current package.

• Link. This is a difficult step, but an important one. Take ...