Deloitte defines total rewards as “the critical integration of an organization’s approach to incenting and rewarding its talent.” that means building good relationship between the organization and its employees relying on specific system for rewarding the assets of the organization.
The main components of the total rewards strategy are as followed
- Compensation: is a monetary and non-monetary pay provided by an employer to its employees. The cash payment includes fixed and variable salaries regarding to performance levels of the employees. Otherwise, there are various payments such as bonus, rewards for overtime works, sales commission and profit sharing considered as non-monetary.
- Benefits: Regardless of employees performance, companies use to supplement the cash compensation employees receive. Including health, income protection, savings and retirement programs provide security for employees and their families. Moreover, benefits distinguish your organization from other competitors by using special benefit system for your employees not just saving their health, but also their entire future.
- Work-Life Effectiveness: this term means how to balance between the employee personal life and work atmosphere. And using different ways to reach to effective results. In addition to productivity and organization loyalty.
- Recognition: Either formal or informal programs that acknowledge or give special attention to employee actions, efforts, behavior or performance and support business strategy to contribute to organizational success. Appreciate your employees, it could be verbally, written, or even financially. Some people feel that the word is more effective than money to appreciate their performance. Also, you make small celebration, arrange thanks meeting or even select employee of the month.
- Performance Management: The alignment of organizational, team and individual efforts toward the achievement of the organization goals. It promotes employees effectiveness through plan, monitor and review employees weakness and strengths points for improvement. An effective performance management system have to be specific, easy to use, practical, support decision making and so on..
- Talent Development: It's way to advance employees skills and competencies in their careers. It's more than training, it's a plan for developing and guiding employees who exhibit skills that contribute to the organization’s success and growth, otherwise it takes much time and efforts to fulfill the gap with appropriate talent you need to fit the position.
Rewards system is motivated method for encouraging employees to achieve incredible performance level in the same time getting employees satisfaction by various techniques to reach organizational goals.
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