Why are organisations considering Total Reward at this time?
Our experience has shown that most organisations’ reward programmes
are fragmented. Typically, they have evolved in a piecemeal fashion over a
period of time with limited consideration being given as to how the various
elements of the package fit together and reinforce each other.
Various factors, including the need to limit future pension costs, the desire
to (and to be seen to) be introducing greater performance-focused reward, a
wish to reward employees in the most cost-effective manner possible and the
need to attract a different talent mix (with different needs and desires) are
resulting in fundamental reviews of reward programmes.
Watson Wyatt’s research shows that almost 80 per cent of companies intend
to take a holistic approach to managing their remuneration/reward programmes
in the future (see Figure 2).
A Total Reward approach provides organisations with a total solution, rather
than a random collection of independent reward initiatives. That means employee
reward packages can be designed using an optimal mix of rewards to achieve
the highest return on investment. For most organisations, this change to consideration
of total reward levels, coupled with the introduction of cost-effective delivery
processes, will result in significant opportunities to reduce or control their
future costs. Total Reward can also be a market differentiator. If positioned
well, it can be a very convincing ‘marketing tool’ for supporting
attraction and retention strategies. Finally, it is easier to manage the design
and delivery of various reward programmes within the framework of one, consistent,
integrated reward strategy.
Figure 2
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Migrating in-house pensions administration and staff by working together in partnership