Finding the ROI in total rewards (On total rewards)

Total rewards in danger of becoming just another euphemism for HR overhead
By David Johnston
|CHRR, Report on Total Rewards|Last Updated: 01/22/2007

In recent years, the concept of total rewards has come to the forefront in the HR community. It makes good sense. In order to better define the employment relationship and provide a focus for the value of programs that organizations offer, employers need to have a structure and framework. Total rewards provides that framework.

However, one of the benefits — or dilemmas — of being around human resources for so many years is that one gets to see the different “wrappers” that get put around much of one’s work. Total rewards for some is a means of presenting and professionalizing what they do. For others it assists in communicating the package they offer employees. And for others still (older HR types who have trouble remembering details and who find concepts easier), it helps to categorize many of the things HR specialists now do for the organization.

While this might sound a little disrespectful, my point is that there is a real issue the profession must address. Unless the return-on-investment an organization achieves from total rewards can truly be measured and communicated, “total rewards” will become another euphemism for HR overhead until the nomenclature is once again changed to reinvigorate the concepts.