Business Category Business: career motivation and tips to move ahead

What are the elements of a total rewards system?

A total rewards system is a modern compensation strategy that incorporates a holistic view of employee remuneration. As the workforce becomes more sophisticated and demanding and competition for the best employees increases in intensity and scope, it is more important than ever to make your company stand out as an exceptional career opportunity. Implementation of a total rewards system can do much to help your organisation attract the best talent available and significantly reduce turnover.

Reward Types

A total rewards system incorporates intangible rewards as well as financial rewards to create an inclusive system that contributes to overall well-being and satisfaction in an employee's work life. Satisfied employees are more productive than unhappy employees, and modern organisations must realise that it takes more than just money to make an employee truly happy. Aspects of the work experience that contribute to employees' mental, physical and emotional well-being must be considered when designing an effective total rewards system.

Salary and Benefits

Salaries and health benefits are the sole components of traditional pay systems, and they must be included in any total rewards system as well. In addition to offering competitive base salaries and flexible pay options, be prepared to offer your employees flexible, customisable health plans to fit their individual needs. In this age of widely varied family and home situations, health-benefits plans are not easily standardised.

The Work Experience

A commitment to improving the work experience is what makes a total rewards system stand out from traditional pay systems. Common characteristics of the work experience include:

Recognition of achievements A pleasant corporate culture Job design and physical work spaces Opportunities for career advancement and skill development A balance between work and personal life


A total rewards system has the ability to greatly increase your company's reputation as an employee-friendly organisation. This reputation will attract more qualified and experienced applicants, and will give you leverage when competing with other firms for valuable employees. Turnover is also likely to decrease significantly, reducing training and replacement costs and allowing you to leverage the experience and skills of more long-term employees.

A study conducted at the WorldatWork Total Rewards Conference in 2007 found that many businesses are investing heavily in total rewards compensation programs. Two-thirds of the 750 companies surveyed claim they have embraced the total rewards philosophy as a way to attract and retain highly skilled talent (see Resources below).

Another study released at the Motivation Show in 2009 finds that employee recognition, when used as a part of a total rewards system, increases employee engagement and productivity, adding value to their organisations (see Resources below).

Follow the links at the end of this article to find these studies.


According to, employers can find it difficult to implement the non-financial aspects of a total rewards system. Buy-in must be established at all levels of management, especially those closest to front line employees. A total rewards system is most effective when all managerial staff members are fully aware of your compensation initiatives and their responsibilities under the new system.