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Total Rewards Strategy
For a benefits program to be effective, it also needs to be tailored to fit into the overall business strategy of the particular organization. Since the benefits program is one piece of the total compensation program, it should be coordinated with the goals of the entire compensation program.
Compensation strategies frequently concentrate on aligning organization and worker goals to enhance productivity. The result is that many programs include not only competitive pay levels but also incentive compensation. This has resulted in a Total Rewards Philosophy.
| Total Rewards Philosophy | The employer uses all of the tools available to attract, retain, and motivate employees. |
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The value of benefits primarily lies in attracting and retaining employees within the organization. This is called membership motivation as opposed to productivity motivation. Regardless, the benefits plan should help to meet the compensation plan objective as it is a necessary component.
An organization that takes a paternalistic attitude toward employees will have a very different approach to benefits than an organization that sees employees as human capital that may be used and discarded when no longer useful. Most organizations today are somewhere in between, with what might be called a partnership attitude.
| Partnership Attitude | Employers can help employees use their benefits to build a financial safety net by providing a flexible framework with choices in the employee benefits plan. The total cost of benefits may be divided between the employer and the employee. |
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Memory Jogger
To integrate the organization's goals with those of the employee, most employers have adopted a(n) ___________ approach.