Packaging pay, benefits offerings

Novell Canada doesn’t use the term total rewards to define its strategy to attract, retain and motivate talent. In fact, Don Chapman vice-president and general manager of the Toronto-based computer solutions provider doesn’t know the term.

He does understand, however, that pay is only a small piece of attraction and retention.

“Our basic philosophy is that we pay average on compensation, above average on benefits and offer equitable recognition, which means that everyone feels like they are being recognized in a fair and equitable fashion,” says Chapman. “That is when people begin to appreciate where they work.”

Benefits at Novell include a technology allowance that pays up to 75 per cent of anything employees spend to “computerize” their homes. The company also gives employees up to $600 a year to spend on fitness, whether it is a gym membership or equipment for the home. Recognition includes a “going to extremes” award where any employee can nominate a co-worker for a $250 cash award for exceptional performance.

Novell may not call it total rewards but it has captured the essence of the idea perfectly. Pay and traditional benefits are just the starting point for organizations looking to land the best people and keep them engaged.

“Across the board, there is a heck of a lot of things that organizations can use to drive employees to high performance, before you get to money,” says Ted Emond, a compensation expert with Hewitt Associates, which prefers the term total compensation to total rewards. Employees want to know they are being paid competitively but beyond that, it’s other things that keep them from leaving and more importantly, doing their best work, he says.

The term total rewards has been in use for years but recently interest is increasing, not waning, says Rose Stanley, compensation and benefits practice leader, for WorldatWork, an association for total rewards professionals.

As HR departments spend less time on administrative activities and focus more on fundamental problems like retention, she says, one of the things they are realizing is the importance of putting together an employment contract that addresses much more than just base pay and benefits. Employees want a rewarding work experience that encompasses everything from learning and development opportunities to family friendly policies and good managers and leadership.

WorldatWork contends there are three elements to total rewards: compensation, benefits and work experience.

Independent compensation consultant Daphne Woolf says the ingredients of a total rewards program are limited only by the ability of HR to quantify their value. It is not easy to capture the value of a good work environment but it can be done, she says. “I think you can even quantify the value of the impact of a good manager versus a bad manager.”

It’s likely the market will start producing more providers willing to completely take over management of the program. “This is about outsourcing,” she says. “Not just the administration, but also the communication.” And communication is key.

In some cases, like a small high-tech company with 100 employees, just putting the program in place is enough to keep turnover down and drive performance. But more likely, to be effective HR has to do more than just create the right package, it also has to sell it to employees.

At Halton Region, just west of Toronto, a total rewards program may not go over too well with employees, says Janice Sidney, manager of compensation and benefits. It’s a matter of optics, she says.

About half of the region’s employees are unionized, “and unionized staff tend to not appreciate non-monetary recognition,” she says.

However, some of the tactics of a total rewards strategy would be beneficial, she adds. There’s value in giving staff a total rewards statement that illustrates just how much the region pays for benefits and pensions.

“It would certainly heighten awareness of the value of the benefits and we have been trying to do some work around that,” she says. “Currently our employees don’t pay very much in terms of the premiums because they are mostly employer paid, so they don’t really see the value of what they are getting.”

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