Enterprises want to find out what is total rewards? The role of the total rewards system? How is this system different from C&B? If this is what you are looking for, please see the following article of Viindoo to find out detailed answers to the above questions.
What is total rewards?
Total Rewards is an integrated system of rewards and employee remuneration of the enterprise. This system is built for the main purpose of rewarding and paying gratitude for the efforts and dedication of employees for the development and progress of the enterprise.
Total Rewards is an integrated system of benefits, salaries and bonuses
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Components of the Total rewards system
Total Rewards System will include the following 5 basic components:
Salary system
Basically, the salary system will include money salaries, bonuses and allowances specific to each employee. Each employee in the business has their own expectations about the level of income and allowances. Therefore, in the Total Rewards system, businesses need to build a clear compensation system that meets the basic needs of employees.
Salary system includes salary, bonus and other allowance
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Policies and benefits
Policy and benefits can also be perceived as the basic benefits that each employee will receive. Developing clear policies and benefits will help businesses retain employees who are dedicated to their work and wants to work long-term. Therefore, businesses should provide employees with basic benefits such as health insurance, fun activities, gifts on holidays, etc.
The policies and benefits that employees can receive
Work-life Balance
Work-life balance is becoming more and more important for employees, especially in a digital age like today. Many companies have introduced policies to ensure employees can work from anywhere, thereby helping employees balance their work and their personal life.
The Covid-19 epidemic has created a wave of hybrid work, in which employees can work from home to ensure health and safety. In addition, many companies also allow employees to take paid leave on important occasions or when there are unexpected personal matters.
Employees need work-life balance
Recognition for employee performance and contributions
This kind of recognition is reflected in the internal incentive reward programs of the company. Enterprises can reward employees monthly, quarterly, or with hot bonuses when employees achieve KPI ahead of time or perform better than the set target.
Rewards in the organization will help motivate employees
Career development opportunities
Businesses now tend to create more career development opportunities to motivate employees to work. These opportunities may lie in job skills training sessions, or specialized courses for professional development. With this new knowledge, employees can also hone their skills and knowledge through creative projects, or campaigns.
With the opportunity to develop professionally and practice what they have learned, employees not only develop and perform well in their work but are also motivated to stick with the company.
TRS works effectively when it shows the employee's promotion path
The role of the Total rewards system
In businesses, the benefits that the Total rewards system brings are clearly shown through the following elements.
- Talent system: When businesses apply Total Rewards successfully, this system will help cut recruitment costs by retaining existing talent in the company.
- Employer brand: When the Total Rewards System works effectively, the employer's recruitment brand will become much better both among employees and among candidates. This will make your recruitment process much more efficient.
- Transparent compensation system: Having a clear and transparent compensation and reward system will make employees feel more secure and trusting with the company's operating system.
- Performance management: With a clear reward policy, employees will be motivated to work more productively. In addition, performance-based pay also helps businesses build a positive attitude towards their jobs, hence developing and motivating the working environment.
- Recognition & Rewards: Through salary as well as benefits for excellent employees combined with recognition from business leaders, employees will feel more motivated and know that their abilities are valued and appreciated.
- Succession Planning: Through the process of personnel selection and development, many talents will be discovered. Thereby, the enterprise will conduct continuous training and retraining to be always ready to succeed in important positions.
- Training and Development: Through internal training programs, Total Rewards System will help employees improve their knowledge and skills. As a result, the professional capacity of each employee will be better developed.
- Employee Retention: Through good remuneration policies and a clear promotion roadmap, the Total Rewards system will indirectly enhance the employee retention strategy, limiting talent loss in the enterprise.
- Onboarding: The Total Rewards system facilitates new employees to easily integrate into the corporate culture. From there, each employee can confidently devote themselves to improving work efficiency.
Understanding the role of Total Rewards is vital to businesses
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The difference between Total Rewards and C&B
It is a fact that a C&B employee can often take on the job of a Total rewards executive. Therefore, many people think that Total Rewards and C&B are the same. To make things clear, Viindoo has created the following comparison table so that businesses can distinguish these two systems.
| Total Rewards | C&B | ||
| Similarities | All are related to benefits and compensation. C&B is an integral part of the Total Rewards system. | ||
| Differences | Definition | TRS is a reward system that helps motivate employees to work and stay with the business for a long time. | C&B are salary packages for employees. |
| Structure | TRS includes rights, benefits, remuneration in life and recognition, and career development opportunities for employees. | C&B includes base salary, bonus and stock, social insurance, and pension plan. | |
| Focus | TRS focuses on a combination of different corporate strategies to attract, retain and engage employees through a clear and transparent reward system. | C&B utilizes available resources to motivate employees. | |
| Approach | TRS uses a continuous approach to remind employees of the benefits of working at the business. | C&B utilizes the annual event so that employees can capture what they have accomplished. | |
Requirements for Total Rewards specialists
In order for businesses to build an effective Total Rewards system with appropriate remuneration policies and strategies, each Total Rewards specialist needs to have a good understanding of this particular system. In addition, Total Rewards specialists also need highly specialized knowledge of human resource management.
At the same time, the personnel in charge of this position also need to have skills in managing investment costs for people and strategies to help the process of applying the Total rewards system take place most effectively. In cases where the company has changed, Total Rewards specialists need to be flexible in making adjustments to the system.
A Total Rewards specialist needs to have the required qualifications and skills
A Total Rewards specialist needs to have the following qualifications and work experience:
- About qualifications: Professional qualifications are essential for every employee the Total Rewards.
- About experience: Experienced personnel will easily operate Total Rewards systems and create appropriate reward strategies for the company.
In addition, a Total Rewards specialist must also have essential skills such as:
- Teamwork: This is an important skill not only for a Total Rewards specialist but also for other positions. Every employee needs to have the connection and spirit to bring the highest efficiency.
- Communication: In this position, HR needs to be able to communicate well with colleagues as well as superiors to be able to create a strategy that best suits the business.
- Technology: When you want to operate a modern system like Total Rewards, skills in using technology are extremely important. Therefore, businesses need to carefully consider the ability to use computers when recruiting for this position.
- Problem Solving: One of the important criteria when choosing a suitable Total Rewards specialist is communicating and solving problems that occur with the enterprise's system management process.
- Enthusiasm: Finally, the person applying for this position needs to have enthusiasm because doing this job is often more boring than other positions. Therefore, Total Rewards managers need to have a spirit of enthusiasm and try their best with their work.
Through the article, Viindoo has explained to help readers understand what Total rewards is as well as the role of this system in the business. Hopefully, through the article, businesses will apply the Total rewards system effectively to help the organization grow more and more.
