Total Rewards Compensation vs. Total Salary: What You Need To Know

We have total rewards compensation and total compensation. What is the difference? Job seekers are not checking the total compensation alone. If they have a chance to know the total rewards compensation, they are going to compare it with other companies. It becomes the basis for making a big decision.

This means that human resources departments are not solely focused on assessing the total compensation for job offers. Some companies are also studying what is the best total rewards compensation strategy to attract more applicants to join their companies and grow with them. With the help of comprehensive, they can monitor the trending rewards that companies, especially competitors, offer in order for them to remain competitive.

What Is Total Rewards Compensation?

Total rewards compensation is an overview of an employee's total rewards package from an organization. It includes monetary and non-monetary rewards along with benefits that employees will receive from the organization in exchange for their work. Some companies combine the two rewards in the total rewards compensation package. Meanwhile, total compensation is the amount of payment employees receive for their services. A well-designed total rewards compensation is essential to every organization because it serves as a form of gratitude.

Nowadays, getting the top talent on the job market is more challenging. Fortunately, we have technology that can assist HR professionals in assessing the compensation structures and finding ways to improve their pay equity practices.

The 10 Elements of Total Rewards Compensation

Total rewards compensation comprises ten essential elements. Together, they form an effective approach to employee recognition and motivation. The main foundation of any compensation package lies in Base Salary, providing financial stability. Usually, HR professionals mention the base salary in the job description or job posting. Then the additional offers are employee benefits and rewards for the skills and experience they contribute to the company.

Other elements, according to Atlas Alignment Partners, that are crucial for adequate total rewards compensation are the following:

• Benefits
• Annual/Quarterly Bonus
• Stock Options
• Recognition Programs
• Work-Life Balance
• Career Development Opportunities
• Company Culture
• Job Security

Total Rewards Compensation Cover Five Areas

Total rewards compensation, including benefits, are a big deal for each job seeker. With the evolving work culture where work-life balance is a top priority, job seekers and employees looking for a career shift are not focusing on base salary alone. They also consider the company's values, if it aligns with their purpose, and how they reward employees for their hard work and loyalty. Overall, HR's responsibilities include effective ways to reward employees. Improving the total rewards compensation structure can kill two birds with one stone. Once you establish a good reputation for rewarding employees, you can attract more top talent in the job market.

Based on World AtWork's model, when planning total rewards compensation, there are five areas that you need to check:

• Compensation - the pay employees receive for their services.
• Employee Well-being - work-life balance.
• Employee Benefits - includes additional monetary and non-monetary perks not part of the compensation package. Some companies offer employee well-being benefits.
• Employee Development - recent statistics show that 68% of employees believe that developmentand training are essential for continued career development and company growth. Thus, the company's policies must include structures that help develop employees' skills and knowledge through training. Employees are not only looking for monetary awards. Millennials and Gen Z also, value knowledge and skills.
• Employee Recognition - focuses on building employee recognition best practices.

Implementing Total Rewards Compensation

We understand that implementing total rewards compensation strategies is challenging whether the company is a start-up or has been in the industry for years. This is why Salary.com updates its data every month to ensure that its clients get the up-to-date information they need to help them align their plans and strategies with the current competition in the job market.

CompAnalyst is here to assist by giving you comprehensive data and automating the survey participation process. By allowing this technology to do automation, HR professionals have more time to focus on assessing the structures and developing the strategies.

Now that you know the tool that can assist you with strategizing, here are the simple steps to follow when designing a new total rewards compensation strategy:

• Assess the current total rewards compensation structure.
• Find out what your employees value.
• Find out what job seekers value by checking the job market.
• Promote leadership by offering promotions.
• Determine what are the priorities and goals of the company.
• Consider checking the company's budget and assessing how the total rewards compensation strategy affects the budget.

 Total Rewards Compensation Wrap-up

In a nutshell, there is a lot of cross over between the goals of attracting top talent and boosting retention. Besides offering a competitive base salary, remember that total rewards compensation must also be competitive. Job seekers also value work-life balance and purpose in pursuing their careers. Do not forget to check your current pay equity practices. Getting this right is a long-term investment for your company.

Building total rewards compensation sounds easy, but many factors must be considered to avoid future problems. We must remember that total rewards compensation is a comprehensive approach for most organizations because it attracts top talent. This means that creating an effective total rewards compensation structure requires a thorough assessment.