The total rewards concept defined

Pay. Benefits. Training and development. Pensions. The work environment. Employee assistance plans. These are just some of the things an employer offers up to employees as remuneration for the work they do.

Over the years different phrases have been used to describe this lump of offerings. Compensation. Total compensation. Pay and benefits. According to Jim Stoeckmann, senior practice leader at WorldatWork, a professional organization serving North American compensation professionals based in Scottsdale, Ariz., the term “total rewards” entered the HR department’s lexicon in the late 1980s.

At its inception, it might have seemed like the latest HR buzzword. A phrase that, in some employees’ eyes, is full of sound and fury, yet signifying nothing. Handled wrong by an organization, it can be just that.

But adopting a total rewards philosophy, embracing the concept and delivering it to employees, can have real value.

Total rewards is a catch-all phrase used to describe everything an organization offers an employee. Different organizations have varying views as to what should be included. But, generally speaking, total rewards includes:


•core benefits (such as health, dental and vision);



•voluntary benefits (such as discounted rates for car and home insurance);

•training and development; and

•workplace culture (including the work environment).

The idea is to pull all of these items together in a total rewards package that can be marketed to existing and potential employees. It’s a way for organizations to brag about what they offer, and is viewed by many as a low-cost way to ensure employees fully understand all the benefits of working for the employer.

But adopting a total rewards philosophy doesn’t necessarily stop at bundling. The idea can be taken to the next level by opening a dialogue with employees to find out what they value in rewards.

Organizations can then tailor what they offer to best suit employees’ needs. In an effort to find out how organizations in Canada are designing total rewards programs, and to get an idea of how widely used the term and the concept is, Canadian HR Reporter surveyed its readers.

The article on page R3 (see related articles link below) outlines how HR practitioners feel about total rewards, the types of benefits they offer staff and what they plan to do in the future. It’s the first in a series of brief reader surveys Canadian HR Reporter has planned for 2005.

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