TOTAL REWARD

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 TOTAL REWARD DEFINED

Total reward includes all types of reward

non-financial as well as financial, indirect
as well as direct, intrinsic as well as
extrinsic. These embrace everything that
people value in the employment
relationship and are developed and
implemented as an integrated and
coherent whole.

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 TOTAL REWARD DEFINITIONS

Centrica
Mix extrinsic and intrinsic rewards to encourage
employees discretionary effort.

Nationwide
A mixture of pay elements, with a defined cash value,
benefits that have an intrinsic value, a positive and
enjoyable work environment, and opportunities for
learning and development; all designed to make
Nationwide an employer of choice.

Unilever
Total reward encompasses all the elements of what
it means to come to work.

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 RATIONALE FOR TOTAL REWARD

Creating a fun, challenging, and

empowered work environment in which
individuals are able to use their abilities to
do meaningful jobs for which they are
shown appreciation is likely to be a more
certain way to enhance motivation and
performance even though creating such
an environment may be more difficult and
take more time than simply turning the
reward lever.
Jeffrey Pfeffer

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 CHARACTERISTICS OF A TOTAL REWARD STRATEGY
(CIPD)

Holistic focuses on how organizations attract, retain and motivate

employees to contribute to success using an array of financial and non-
financial rewards.
Best fit tailored to the organizations culture and work processes.
Integrative the reward system is integrated with HR policies and
practices.
Strategic aligns reward and business strategies.
People centred focuses on employee needs and wants.
Customized provides a flexible mix of reward that offers choice.
Distinctive uses rewards to create a distinctive employer brand.
Evolutionary long-term, incremental approach.

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 TOTAL REWARD MODEL Michael Armstrong

Base pay
Transactional Total
Contingent pay
rewards remuneration
Employee benefits
Total reward
Learning and development
Relational Non-financial
rewards The work experience rewards

Recognition, achievement, growth

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 TOTAL REWARD MODEL Towers Perrin
TRANSACTIONAL
(TANGIBLE)

PAY AND REWARD BENEFITS

base pay pensions
contribution pay health care
shares/profit sharing perks
recognition flexible benefits
LEARNING AND DEVELOPMENT WORK ENVIRONMENT
workplace learning core values
training leadership
performance management employee voice
career development job/work design

RELATIONAL
(INTANGIBLE)

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 TOTAL REWARD MODEL WorldatWork

Total
reward strategy
Organizational
compensation
culture Employee
benefits Business
worklife satisfaction performance
Business strategy attract
performance and motivate and and results
recognition retain engagement
HR strategy
development and
career opportunities

Total rewards are all the tools available to the employer that 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.

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 TOTAL REWARD MODEL Watson Wyatt

Business strategy

Human capital strategy

Total reward strategy

Fixed reward costs Performance-based rewards Environment-based rewards

Fixed costs of employment Variable costs of employment Intrinsic rewards

Value of role to organization Contribution made by individual Employment deal

effective delivery through focused communication, greater flexibility and use of technology

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 TOTAL REWARD AT NATIONWIDE

Development
Our strategic
objective for rewards:

To attract, retain and Environment

Reward
motivate people to
perform to the highest
standards possible. Committed and
engaged employee
Those who excel by
living the values and
contributing the most
will benefit the most. Leadership Quality of
behaviours work

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TOTAL REWARD FRAMEWORK Norwich Union Insurance

Reward Performance

pay recognition
Progression,
benefits performance brand-supporting
and pay behaviour
challenging work

Development Career framework

learning opportunities career opportunities

personal development meaningful job content

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 TOTAL REWARD ISSUES

How do we convert rhetoric into reality?

How are we going to persuade people that

total reward is a good thing?

How are we going to communicate the

benefits of total reward?

What priorities do we give to the different

elements of total reward package?

How do we make total reward work,

bringing the elements in the package
together?

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