As the labor force becomes more highly developed and demanding, rivalry between organizations for talented employees is drastically increasing. It is extremely important that organizations make their company more enticing as an incomparable career opportunity. Instituting a total rewards system into an organization can do much to help it invite the paramount talent available and significantly condense turnover. The longevity of an organization’s employees is contributed to its total reward system.

The definition of total rewards

According to Heneman (2007), total rewards is defined as all of the tools, whether intrinsic or extrinsic, offered to the employer that may be employed to attract, motivate and retain employees.

This could be monetary or non-monetary remuneration which includes not only compensation and benefits as well as personal and professional growth opportunities and a motivating work environment. Often times in the retail industry, especially among women consumers, shoppers will often times see a garment and it is sized “one-size fits all”.

If the average female shopper buys the garment, they will soon discover “one-size fit all does not really fits all or it is not the fit they prefer.

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The tag should read “one-size fits most” instead of “one-size fits all”. If a garment sized this way does not always fit every consumer perfectly as initially planned, do you think a one-size fit all reward program fit all employees in the business industry? Because consumers comes in all shapes and sizes, the clothing retailers commonly offer an assortment of sizes, rather than a plethora of “one size fits all” garments.

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Organizations can learn a lot from the retail industry if they too would realize a total rewards package is being offered to a number of employees with different wants and needs and the “one size fits all” approach does not work when it comes to attracting top talent. Just as the clothing retailers realize to be successful they have to sell to different consumers, organizations need to implement different assortments of reward packages for different workforce segments (WorldatWork, 2007, p. 5 para. 1). According to WorldatWork (2007), there are five top advantages of a total rewards approach. These advantages of a total rewards approach includes increased flexibility, improved recruitment and retention, reduced labor costs/cost of turnover, heightened visibility in a tight labor market, and enhanced profitability. Increased flexibility is organizations acknowledging that it would be advantageous for employees to integrate their lives with their work.

Workplace flexibility

Workplace flexibility is an essential module of any organization’s attraction and retention strategy. Whether the employees are Baby Boomers, Gen X or Gen Y, recognizing flexibility in when, where and how they achieve their work obligations are significant dynamics in sustaining their motivation and loyalty to their employer (WorldatWork, 2007). Because of the struggling economy and an escalating populace of Baby Boomers heading toward retirement, employers are encountering major in recruitment and retention of top talent.

According to Smith (2008), “a recent study shows 85% of HR executives state the single greatest challenge they have in managing the workforce is their organization’s inability to recruit and retain good employees and managers (Smith, 2008, para. 1). ” As an employee, I do not equate my self-worth in only monetary value but how my organization appreciates my contribution and my career growth within the company. A reward package that included a strategic plan for recruiting and retaining workers can show the potential employee(s) the organization’s career opportunities are just as vital as their monetary compensation.

Retention and recruitment

Retention and recruitment has a direct correlation with reduced labor costs/cost of turnover. If there was no turnover, no retention or recruitment strategy would be necessary for any organization. Turnover is becoming a serious problem in the labor force today. Working with the Department of Labor, I hear idiotic philosophies of some Gen X and Gen Y about “job hopping”. With the Baby Boomers about to retire, the employment philosophy for Gen X and Gen Y is changing as well. It is now fairly common for today’s labor force to change jobs every couple of years, rather than maintain longevity with one company.

Turnover costs for many corporations are costly and can drastically affect the financial functioning of an organization. An organization that is successful in reducing their labor costs will be able to enjoy a better profit margin. Strategic planning must be implemented to assess the cost of turnover, build retention strategies, and strategize for anticipated and unforeseen turnover and a shifting labor force culture. Organizations are aware of the tight labor market and are heightening their visibility to the situation.

Rewards effectively designed by an organization allow their business to entice and magnetize top talent from a shrinking labor pool. By offering what employees value, usual companies can reduce the migration of employees to other organizations by employing what their employees say they value most (WorldatWork, 2007, p. 17). Martin (2006) maintains that: A direct link exists between employee motivation and product/service quality. When employees are aware of the company’s goals and objectives, and know the significant role they play, they will provide higher quality products and services.

Implementing a model to reward employees for meeting company goals is one way to motivate employees. The key thing to keep in mind: Happy employees = higher profits (para. 7). Unless an organization is willing to cultivate and execute a reward program that capitalize on a divergent workforce, a strategy at aspiring to attract, retain, and motivate the right people will never be successful and will go off target. There are five commons mistakes a total rewards strategy can go astray. One is by re-engineering programs in pieces.

Developing a program on a short-term basis

Developing a program on a short-term basis is only a bandage fix and will not be a solution. If a reward program is implemented, it should be on a long-term basis. Incentive programs need to understood, promoted, and communicated to the employees to stay competitive and retain top talent (WorldatWork, 2007, p. 19). A second mistake made by an organization is trying to implement a program at once. If an organization is going to develop a rewards program, it should assess its present programs and chart a corrective course for the future.

One of the key resources to utilize in formulating such an evaluation is significant players that drive the success of the organization. Primarily, these are individuals that want to see the company succeed. In that context, they hope to cultivate individually, professionally, and financially. Setting a realistic goal of two-to-five years to implement changes will be a productive strategy for the organization (WorldatWork, 2007, p. 19). A third mistake made by organization when developing a rewards program is limiting the number of people involved.

Remember simplicity is not always the best answer. Involving different people in a total rewards effort is crucial to determine how best to move forward. Nevertheless, it must be executed in a practical way that permits company owners to sustain control and permeate thought leadership into the process (WorldatWork, 2007, p. 19). A fourth mistake made by organization when implementing a rewards program is not doing a through impact analysis. When modifications occur within your organization, do you ever wish that someone would think things through to circumvent the disruption that often follows?

An impact analysis

It is important to do an impact analysis but it is a bit challenging. The trial in performing an impact analysis is to summarize and organize all the possible cost of the decision; and subsequently ensure that these are managed properly. Brainstorming an impact analysis will give the major areas affected by the decision and whom or what it might affect (WorldatWork, 2007, p. 19). Lastly, a common mistake made in implementing a total rewards program is not communicating effectively. Communication is the key element in any areas whether personal decisions, professional decisions, and financial decisions.

Too much or too little communication has shattered organizations, careers, broken marriages and created very depressing and desolate outcomes. C-level players should never regurgitate all information to rank; they should determine the proper information to divulge and when to deliver it (WorldatWork, 2007, p. 19). Before anything is communicated to rank and file, the organizations should be designing a total rewards program by obtaining a clear understanding of the situation through analysis and assessment. A rewards program should be premeditated to balance the needs of the organization with the desires of the employees.

The organization needs to view compensation holistically to make sure this is feasible. Next, the corporation needs to design a program that will include the organization’s mission, vision, and the business strategy. It should also include HR’s philosophy and strategy, the total rewards philosophy statement, and the total reward strategy. In developing a total rewards program, the conception of total reward embraces all facets of work that are esteemed by employees, including fundamentals such as training and growth opportunities and/or an pleasant working environment, additionally to the better pay and benefits package.

One should remember in developing a total rewards program reward strategies are diverse but should include a declaration of intent, •a rationale setting out the business case for the reward proposals, a definition of guiding principles, and an implementation plan (Egan, 2011). Every organization needs an effective communications plan to facilitate and certify the success of the general business plan. Communications consist of all written, verbal and electronic interactions between the organization and audiences internally and externally.

The systematizing the communication tools and schemes

A plan will assist in systematizing the communication tools and schemes used to provide the right information to the right people at the right time. It will facilitate in keeping your stakeholders knowledgeable and sustain their buy-in and support. An organization should incorporate these eight steps to develop an effective communication plan. First, analyze the situation by deciding the organization’s strategic purpose with regard to corporate communications plan. Secondly, define the objectives by knowing how it connects to your organization’s business plan this should be cognitively, affectively, and behaviorally.

Decide your plan of attack, whether you are going to reinforce retention and recruitment, increase pay, or promote something else. Steps three and four are connected because you have to conduct audience research and determine which audiences you want to influence as well as determine the key message to deliver. The messages link the content of the communication to its objective. The plan should give a determination as to what, how, when, where, and to whom to communicate (WorldatWork, 2007, p. 60).

Decide which affordable tools you can use to achieve your goals and articulate your purpose. This goes back to the point aforementioned in knowing deciding how things will be communicated whether written, verbally or electronically. The message plan should include what to say, how to say it logically, symbolically and who should say it. The next steps should include gathering all data to know how the plan will be implemented to include even the estimated cost of each initiative and how it will be delivered.

Once the plan has been implemented and conveyed, it should institute priorities, deflect eleventh-hour and unsuitable demands and develop exuberance to the organization (WorldatWork, 2007, p. 62-63). Once all this is implemented and tested the organization should measure the results. An organization should remember effective communication with employees is the key in implementing a total rewards package. The plan as well as the communication of the plan should be delicately planned and synchronized in order to serve it purpose.


  1. Egan, J (2011). Strategic reward and total reward. January 2011. Retrieved from http://www. cipd. co. uk/hr-resources/factsheets/strategic-reward-total-reward. aspx
  2. Heneman, R. L. (2007). Implementing TotalRewards Strategies: SHRM Foundation’s Effective Practice Guidelines Series. Retrieved from http://moss07. shrm. org/about/foundation/research/Documents/07RewardsStratReport. pdf
  3. Martin, C. (2006). Total Rewards: The Tangibles and Intangibles of Designing a High-Impact Benefits Package. September 21, 2006. Retrieved from http://www. preceptgroup. com/company/news/article. aspx? prpri=99. standard
  4. Smith, G. P. (2008). Recruitment and Retention Strategies: How to Attract, Keep and Motivate Today’s Workforce. Retrieved from http://www. managerwise. com/article. phtml? id=649
  5. WorldatWork. (2007). The WorldatWork handbook of compensation, benefits, & total rewards Hoboken, NJ: John Wiley & Sons

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Why Total Reward Is Important?. (2020, Jun 02). Retrieved from

Why Total Reward Is Important?

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