A new approach to total rewards strategies

With the traditional practice being outdated, employers who have failed to transform find it challenging to attract and retain talent in a tight labour market.

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Total rewards policies are critical for all businesses that aspire to acquire skilled talent—agile and competent— possessing the capabilities to drive synergies, to transform their organisations into future-ready workplaces. Human resource leaders are cognizant of the process being an ongoing one, and are unanimously working towards a more holistic practice, through continuous brainstorming. Globalisation blurs geographical boundaries between nations, giving an opportunity to leaders in the emerging markets to identify the best practices of leading organisations.

Being their agile best, HR leaders are swiftly adopting futuristic practices with a people-first attitude.  HRKatha spoke to Srinath Krishnan, compensation and benefit head, HPE, and enquired about futuristic total rewards practices.

Praveer Priyadarshi

Total rewards also include culture— organisation’s philosophy on people matters, for instance, recognition of high-performing employees and taking responsibility of their career development, flexi work hours and work-from-home, which the millennials seek

“A futuristic total rewards strategy should not be limited to only elements of compensation and benefits, but also address emotional, physical and financial wellbeing, career development/growth, work–life balance and the ability of the organisation to design benefits specific to a multi-generational workforce,” says Krishnan.

Leaders strategise total rewards by dividing it into four important components. The policymaking process, within each of these factors, takes into account the needs of each generation of the workforce and inches closer to diversity and inclusion goals.

Pay: HR needs to address industry-specific pay challenges, both ongoing and those that are emerging in light of economic changes. Moreover, there is also a need to keep track of government regulations.

Benefits: Agile practices are required, to ensure optimisation of benefits offered to meet evolving talent expectations and organisational needs.

Wellbeing: All elements of wellbeing need to be taken into consideration, including physical, emotional, social, financial needs and challenges.

Career and development: Career paths have to be mapped and opportunities created to achieve milestones with personalised experiences.

The new total rewards programme requires HR to rethink the traditional practices scientifically. Digital tools, such as data analytics can help them to better understand the expectations of the diverse generations. The truth is that, employees want their organisations to leverage technology. They prefer to use digital programmes, such as a personalised portal or website to track their rewards and benefit engagement.

The modern total rewards practice is designed keeping in mind what employees want, just as business strategies are devised keeping customers in mind. For a business to be financially successful in the changing world, it requires an agile total reward policy that employees value most. Leaders typically brainstorm to understand the entire spectrum of possibilities and use these insights to develop an integrated reward policy.

Praveer Priyadarshi, former CPO, Jindal Stainless, shares his insight on the topic— “Total rewards also include culture— organisation’s philosophy on people matters, for instance, recognition of high-performing employees and taking responsibility of their career development, flexi work hours and work-from-home, which the millennials seek. In other words, align reward policies to create a community feeling amongst the employees”

A total rewards system that is progressive, unlike the traditional one, encourages transparency and total articulation. Organisations realise the need to bring in more transparency in their total reward programmes, including the cost they incur in providing benefits.

Srinath Krishnan

A futuristic total rewards strategy should not be limited to only elements of compensation and benefits

 

Employees often value and compare their rewards in terms of cash compensation and are not privy to the huge investments a company makes in benefit programmes, especially ones, such as health and family insurance, contribution to pension schemes, health screening and higher education. “Hence, today, along with the salary increase or merit increase statements, organisations also provide the local currency value of the cost of benefits, long-term incentives and other cost incurred as part of their employee development. This helps employees see things in perspective and also realise the investments the company is making on their retention and growth,” opines Krishnan.

New-age organisations are making a big change by incorporating softer ways to strike a chord with their employees, such as dropping personal messages of gratitude, celebrating career milestones and festival giftings. While some companies have a six-day work policy, HPE disperses its employees early every second Friday, giving them an extended weekend to enjoy.