Organisations need to learn to embrace a holistic approach to remuneration, rewards and performance to attract the right talent, writes John McGill.
Implementing a total rewards programme in New Zealand businesses can have major benefits in terms of staff performance, among other positive effects.
Aligning organisational strategy with other facets of your business is not a new concept. Yet organisations need to learn to embrace a holistic approach to remuneration, rewards and performance to attract the right talent.
This is where the ‘World at Work Total Rewards Model’ comes into play. Meeting both extrinsic and intrinsic motivators, the dynamic between employer and staff should encourage high performance and job satisfaction.
So, what is involved in the total rewards model and how can Kiwi businesses benefit from this approach?
World at Work identified six key elements to their model:
- Remuneration: How much an employee is paid for their services, including fixed and variable remuneration.
- Benefits: What an employer offers to complement or supplement monetary bonuses. This could include health, retirement or savings programmes.
- Talent development: The tools and opportunities provided to improve skill sets and competencies that affect both short and long-term career success.
- Work-life effectiveness: The extent to which the workplace allows staff to succeed both in the office and at home. Practices, policies and programmes all come to play here.
- Performance management: How aligned are efforts of both the organisation and an individual to reach the business's goals? Includes continuous improvement, feedback and expectation management among others.
- Recognition: Acknowledging the achievements and hard work of employees either formally or informally.
- The key point of the total rewards model is how important it is to have an approach towards employee engagement and performance that combines all different facets of a satisfied work life.
How does this benefit business?
Once businesses implement bigger picture thinking into their operations, the effects will expand across the entire organisation.
Since a total rewards model considers a wide range of different motivators, employees are more likely to remain with the company. The way holistic rewards approach job satisfaction, means that staff tend to feel more valued and satisfied with the benefits accompanying pay.
With increased job satisfaction comes heightened performance. Employees are supported in their personal and professional growth, something that not only improves their knowledge and skill sets, but enables them to do their job more effectively.
In terms of monetary benefits, reduced turnover rates are a clear cost advantage. Furthermore, total rewards models allow an organisation to have a clear overview of the anticipated expenses for each employee, usually including additional expenses such as training programmes. This means more transparency and better control of business costs. M
John McGill is the CEO at Strategic Pay. If you would like to learn more about the total rewards model, visit Strategic Pay’s website to read its recent whitepaper on connecting pay and strategy or reach out to the team directly.