TOTAL REWARDS SYSTEM (TRS) | HR CONSULTING | LEGACY BOWES
Total Rewards System (TRS)
Five Steps to Solve the Total Rewards Puzzle.
Today's businesses survive and thrive based on the productivity of their employees. A holistic approach to servicing the needs of employees serves to ensure your team's efforts and minds are on the job at hand and not needlessly worrying about any controllable component of their work experience, their culture/environment nor their compensation and benefits.
Total Rewards in a nutshell - A Total Rewards System (TRS) is an integrated reward system encompassing three key elements that employees value from their employment: compensation, benefits and work experience.
A successfully implemented total rewards system helps organizations build a powerful benefit structure. This benefit structure will not only motivate the workforce but also regenerate a balance between corporate dollars spent and employee appreciation and engagement. The “TRS” chart below illustrates what can make up a total rewards program.
|Total Rewards System (TRS)|
||Culture & Environment
How does Total Rewards System work? A total rewards approach helps both employer and employee to look beyond “monetary rewards” and strategically evaluate the value of non-monetary rewards. All elements of the rewards program are then integrated into one system.
Why adopt a total rewards approach now? In today’s ever competitive business environment, it’s becoming more and more difficult to offer higher wages and more benefits. Benefit costs are sky rocketing and threatening to go up even more in the years to come. Companies are being even more careful as to how they spend every dollar. As a result, employers are looking for alternative rewards that cost less but still motivate employees to excel.
How can you successfully and cost-effectively implement a total rewards system? Every time the word “benefit” is mentioned, the phrase “daunting costs” always jumps to mind. An effective total rewards system may help break this connection. A disciplined implementation strategy will allow the organization to regain control of each dollar spent. The process identifies inefficiencies and finds the missing links between the rewards and business strategy.
Secrets to a Successful Total Rewards System
1. Assemble the right team – the chance of success depends on inputs from all parties that will be impacted by the program. All stakeholders need a place at the table.
2. Take inventories of everything that’s in the mix – every program, plans, benefits, and perks, including those that are not in use but may be considered in the future.
3. Assess and rank each program
- a. Start with surveys & benchmarking - use industry benchmark surveys and internal employee surveys to assess how effective each program is. Effectiveness should be measured in different ways. For example, low participation rate could mean low interest; however, it could also mean low understanding of a particular program.
- b. Review each policies and link to business strategies – this is one of the most critical steps. This is where the policies are mapped to each business strategy. For example, is the purpose of your policy to motivate a sales force, to increase customer satisfaction, or to retain personnel in a nonprofit organization?
- c. Conduct impact analysis – Before implementing each program, ask this question: what’s the financial, organizational, employee, customer impact of the plans? What if the company profit drops by 30%? What if revenue doubles? Look at both issues today and into the future.
4. Implement changes in stages – set a timeline to phase in the programs. It is important to give managers enough time to absorb the initiatives and build new performance measures before the roll-out. Where multiple divisions or facilities are involved, a pilot plan can be used.
5. Communicate, communicate, and communicate – a plan that is not communicated is no better than no plan at all. Proper communication is the ultimate key to the success of a total rewards system. A communication strategy needs the right amount of information, being delivered at the right time and through the right media. Effective communication does not need to be expensive. Well-written, creative communication material – combined with face-to-face discussions – can sometimes be more effective than four-color, glossy booklets or sophisticated videos.