The Value of Total Rewards Statements

Does your company publish total rewards statements?  They have become more and more common over the years.  They allow companies a chance to tout all of the benefits programs they provide that many employees may not even be aware of.  They provide the opportunity to show your employees how much you actually spend on them, as well as a vehicle to explain the more intangible but still important benefits you offer.  But they are certainly a large investment of time and can be a significant investment of money.  So why do companies bother?

Studies have shown that engaged and satisfied employees help to create a more successful business.  Both the Hay Group and Towers Perrin have conducted studies that show a strong correlation between employee satisfaction and their understanding of their rewards programs.  They found that the companies with stronger business results did a better job of making their employees aware of their rewards programs.    

They found in their studies that high-performing organizations did a better job in the following areas:

• Communicating the purpose and intent of total rewards programs
• Frequently communicating the value of total rewards
• Engaging line managers in the reward communication process
• Evaluating the success of reward programs

Employees understand how much they earn in cash.  What they frequently don’t understand is the value of the various benefits plans offered.  Total rewards statements are an excellent vehicle to show your employees the full amount you pay on their behalf.  Our company also issues a simplified total rewards statement when we extend a position offer to help the potential new employee compare offers and understand how strong our rewards/benefits programs really are.  These statements are an investment, but it’s one that can really pay off.

Here is a list of a few additional benefits your company can experience with the publication of total rewards statements:

• Increase the perceived value of total rewards
• Assist in motivation and retention (and attraction/recruiting)
• Provide a relevant tool to communicate your company culture and values
• Make employees aware of the full array of programs you provide

Comments

[Paul Weatherhead]

Several years back I had an adult college student give a presentation on her employer's benefits. She went through her presentation and I asked her why she didn't mention health benefits. She said that yes her employer had health benefits, but since there was no employee premium on her pay stub, she didn't think it was worth mentioning. Can you imagine that!

In today's information age, there is no reason why an employer shouldn't prepare a customized annual statement. If you'd like to see the 2-page statement that the USPS uses for 700,000+ employees, send me an email at [email protected].

[Vita Taylor]

Thanks Darcy and Paul,

Don't you think that now, of all times, it would be valuable to have total rewards statements?

In a time when companies are struggling to pay out more in annual salaries, wouldn't it be ideal to show just the value they are already paying out in salaries, incentives, and benefits?

I don't think there could be a better time to introduce this type of communications than right now!

[Becky Regan]

Total rewards statements are a "must do" for employers given the cost of today's benefits. Taking the time to sit down individually with each employee and reviewing the true value of their annual total compensation is an important, but frequently missed delivery opportunity that employers can leverage to really drive home the dollar value for each employee.

[The HR Dude]

I don't mean to be skeptical, but, I am a little confused on the tie between TR Statements and Value of Total Rewards. I, as an employee, have an intrinsic value that I place on the TR programs my company offers - for example, i value telecommuting more then i value pet insurance. I understand what programs are offered and what is important to me. I often feel somewhat insulted at the end of the year when i sit down with my director and they explain my TR statement. I know the organization pays X amount of dollars for Social Security and Unemployment Insurance and that they paid $1300 for a training program - but that does not enhance my engagement at work, it feels more like a "you cost us more then you think" statement.

Maybe it is time to re-think the statement and use it as a "value" dashboard (for example: telecommunting - 150 days) versus a "you cost us more then you think" statement

[Darcy Dees]

HR Dude - Two things struck me in reading your comment. First, since you're in HR you probably are aware of and have a good understanding of all the programs your company offers. We've often found that people didn't realize or had forgotten all of the programs that we offered, so it is a good opportunity to remind and educate people. Second, it sounds like your statements aren't being delivered with a message of "thanks". The primary element that is required to make any program successful is communication. Thanks for the comment, it was a good reminder that we can't ever forget to pay attention to how the message is delivered.

[The HR Dude]

Thanks Darcy. I think sometimes I might get a little cynical - and maybe that gets caught up in my postings. I think the intent of TR statements is right on - if the organization uses them as a "thank you." However, i think that message gets a little muddled when we (as HR professionals) attempt to put a dollar amount next to the thank you. For example, is it truly a "thank you" if the TR statement says under Career Development that you went to a workshop and it cost the organization $1300? I am just wondering - if the main goal is to say "thank you" and to inform the employee on various programs, is it time to re-evaluate the statement? Would it be more of an engagement tool if the program were listed (such as teleworking) and how frequently it was used (56 days). By moving away from cost and to usage - this might enhance employee engagement.