Total Rewards Statements: Investing in Employees

Total rewards, at a high level, divide into two categories:  1) direct compensation (i.e., salary), and 2) indirect compensation (i.e., benefits, schedule, training, development, etc.). These two pieces work together to provide rewards to employees for performing work on behalf of the organization, and ideally motivate them to continue working toward the organization's goals.

A total rewards statement (TRS) is a comprehensive listing of the rewards provided, including monetary values, to holistically capture the total investment an organization is making in its employees. They should be individualized to each employee's benefit enrollment, salary and bonus structure, and ideally include a letter or another positive acknowledgment of the employee's efforts to further the organization's objectives.

Not all rewards are easy to understand or conceptualize, especially when referring to intangible benefits such as flexible hours, or a hybrid or fully remote setting. How does one put a price on working remotely? What if a remote work setting is valued differently by employee populations? Sometimes it doesn't make sense to monetize the value of everything, but there are some broad categories to consider, including in a TRS.

Broad categories are helpful to include in a TRS as they further segment the rewards into themed areas such as Health, Work-Life, Retirement, Compensation, Paid Time Off, and more. Once you have identified categories, individual rewards can be listed out. Here are sample line-item rewards within standard categories:

• Compensation
• Annual Salary
• Bonus
• Commission
• Paid Time Off
• Vacation
• Sick
• Holiday
• Bereavement
• Catastrophic Leave
• Benefits (Mandated)
• Worker's Compensation
• Social Security
• Medicare
• FUTA Tax
• Benefits (Insurance)
• Medical
• Dental
• Vision
• Life Insurance
• Long-Term Disability
• Short-Term Disability
• Health Savings Account
• Work/Life
• Employee Assistance Program
• Tuition Reimbursement
• Training/Development
• Wellness

Breaking it down even further, the contributions made by the organization and those made by the employee can be highlighted separately and shown in a pie chart or another graphical form.  This demonstrates the organization's investments alongside the employee's investments in rewards.

Showing and explaining the total investment being made in each employee can create feelings of goodwill, increase trust, and help employees understand they are receiving more than their direct compensation (salary) each month or every other week on payday. Educating employees on the unseen investments can be eye-opening and help the organization be strategic in its investments too.

The rewards mix offered by any organization is strategic and most importantly should be tailored to the organization's workforce, along with the need to maximize returns on investments. You likely already have the information needed to develop statements for employees, it's just a matter of separating the information applicable to each employee and formatting it in an understandable way.

Want to learn more?  Attend our upcoming HR Connect training on February 28^th, Total Reward Statements – The Answer to How Much Do I Really Make?

Sound a bit overwhelming to start on your own, or short on time? Let us develop them for you! To welcome in 2024, we’re one-upping the new year with 25% off our hourly rate on total reward statement creations through March 15^th. Reach out to our Compensation team for a quote and we'll be happy to help!