Every year, companies create total reward statements for employees with the hope these statements will attract, motivate and retain employees. Some are designed to reinforce an organization’s HR brand and differentiate the company from other employers. Others raise awareness and appreciation of the benefits offered by the company. Some statements, albeit electronic or paper, try to do all of this with varying degrees of success.
The total reward within a company is usually driven by how the company operates. Some are global, with localized operations, while others have very centralized operations. Big or small, each has its own prescribed ways of operating.
In all these cases, the only common factor is the bottom line — after all, isn’t that why companies are in business? What if a total reward statement could go beyond pinpointed employee engagement and help the dollars and cents of a company?
With ever-increasing pressure to maximize profits and grow business, companies need to be smart about how they spend their money and understand the impact of reward decisions. For example, if a company wants to give each employee a two per cent raise on base pay, that’s not just a two per cent increase on the books, it’s more like 10 to 15 per cent depending on benefit structures or jurisdictions.
So how do employers know they’re making informed decisions? In our time of instant access to information, speed and accuracy are expected. The world we live in today is bursting at the seams with data and information. Companies spend obscene amounts of money on human resources information system (HRIS) implementations but, with all this capability at their fingertips, how quickly can they really crunch the numbers?
Organizations need to get smart about tapping into available sources and making the data work for them. For starters, many human resource professionals create a total rewards statement every year and release it to employees with great fanfare. But in a matter of days all is forgotten, the data is stale, spread over numerous excel files, and not really in any state to be analyzed quickly, easily and accurately.
How unsatisfying must that be? Months of effort to compile, collate, check and publish a statement that is all but forgotten soon after it’s released. To add insult to injury, the data is dated and not very useful.
Companies need a total reward system, not a giant mail-merge application. If an organization is going to spend the time and effort pulling all this reward information together, then it should get smart about it. That means leveraging the massive investments in its HRIS systems to provide driving data, such as the location you work at, pay scale level or various eligibility criteria.
Formulae within the system use these values to calculate the various benefit values. These stored values, in turn, help the enterprise and its employees make better, informed decisions.
Companies shouldn’t stop there. Once the statement is published, survey technology can be used to gain insights into a workforce’s psyche. How do employees feel about their benefits? Would they be good advocates for your company? Data and modern tools can analyze comments, tag them, pick out trends and visualize these trends to make it usable.
Using feedback from the crowd, elements of gamification and audience participation will help manage reward spend and improve employee performance. By understanding reward value from an employee’s perspective, organizations can make better decisions on their reward spend.
Another way data can help make better spend decisions is through calculations and tracking. Because benefits are being calculated, actuals versus projected budgets are tracked in real-time. Plan administrators can use total reward data as the basis for benchmarking studies, annual salary budget plans or future expansion modelling. Systems like this should be inexpensive and easy to implement, along with being very intuitive to use and, most importantly, justifying ROI.
HR professionals should ask themselves: What will my next spend be on? Will it make my job simpler, more complex or just plain miserable? Will it allow me to do more with less? How can I make my total reward statement investment worthwhile?
Companies need to shift their perception of a total reward statement and what it does for both employees and the enterprise. It’s time to move towards sticky employee engagement through participation and data-driven insights to make informed spend decisions. A total reward statement is no longer just an annual statement — it’s a strategic business tool that can help a company’s bottom line.
Karim Kurji is a Toronto-based principal of technology and delivery solutions for Buck Consultants at Xerox. He can be reached at email@example.com.
© Copyright Canadian HR Reporter, HAB Press. All rights reserved.