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For HR professionals, competition for top talent will only heat up as business becomes ever more tech driven and job requirements more specialised. Add a multi-generational workforce to the mix and you’re staring at a pretty formidable Total Rewards challenge.


The original Total Rewards Model (TRM), introduced in 2000 by WorldatWork, has become central to HR strategy in the 21st Century. More toolkit than prescription, the model represents a complete package of employee benefits that organisations can tailor to create a unique and competitive employee value proposition. While several variations on the original model have been introduced over the years by different people, the core principles remain constant and the original model remains popular among HR practitioners and researchers.


Defining Total Rewards

The Total Rewards Model encompasses six components: compensation, benefits, work-life effectiveness, recognition, performance management and talent development.

Within these broad categories fall elements like base pay, performance pay, medical aid, retirement fund and employee benefits such as flexi-time and on-site childcare.


Total Rewards Strategy Model

  • Compensation: Reward for services rendered. This includes both fixed pay such as salary, variable pay like commissions and premiums such as skills-based pay.
  • Benefits: Provides financial security for employees and their families. Programs include health insurance, income protection, savings and retirement and medicare.
  • Work–life effectiveness: A specific set of organisational practices, policies and programs such as job security and teleworking. These provide work flexibility so employees can effectively manage work responsibilities and also attend to personal problems and family-related issues when necessary.
  • Recognition: Formal and informal programs that highlight and acknowledge employee performance and contributions to organisational success.
  • Performance management: The alignment of organisational, team and individual efforts towards successful achievement of business goals. This can be accomplished through proper planning and employee evaluation.
  • Talent development: Provides the opportunity for employees to improve their skills and knowledge through training and learning opportunities.

Source: SAJHRM (Vol16) 2018. 

The premise of Total Rewards is simple: By offering an attractive and personalised choice of rewards and benefits, employees will feel satisfied, be more engaged with work, perform more effectively and generate better business results.


But, there’s more

If you’re developing or refining your Total Rewards strategy, remember to make allowance for discretionary rewards. These are the big and small rewards that you can use to incentivise, recognise or surprise and delight employees.

At a time when organisations are looking to position themselves as employers of choice for top talent, these rewards offer the opportunity to differentiate your company and firmly establish a positive company culture.

The right rewards, used effectively, have a big impact on employee engagement, motivation and performance. If you’re not using rewards in your business, now’s the time.

From high-end group incentive travel, to everyday thank-you lunch vouchers, discretionary rewards complete the Total Rewards menu. Aspirational, affirming, performance-enhancing rewards you can give every day.


Total Rewards plus

Rewards, incentives and gifts all enrich the employee experience in different ways, for different reasons and with different objectives. There’s an art and (behavioural) science to purposeful delivery, but first, you need to understand a few fundamental definitions.

Incentives and rewards are similar, but different. Gifts are something else again. The terms are frequently confused, or just plain misunderstood, in workplace discussions. So, let’s clarify. (For more details on the topic, see the GET Rewards Guide: The right rewards drive ROI.)


Incentives are used to motivate employees to reach specific goals, and then to reward them when they do. For example, they’re often used to encourage sales staff to hit their targets. Incentives are always communicated upfront, so people know exactly what they need to do and by when in order to earn them.


Rewards are generally used to recognise and reward employees for excellent performance or specific behaviours which have already been demonstrated. They can be used to express appreciation for a job well done and can be given on an ad hoc basis – to surprise and delight – and form part of a structured rewards system.


It’s easy to confuse rewards and gifts. They may well be the identical ‘thing’, but the big difference lies in the rationale for giving. Rewards are earned. Gifts are freely given with no expectation or conditions attached. No specific behaviour or performance is required. Gifts just arrive unannounced (like desk drop chocolate bars) and are given just because (it’s Friday, why not) and are often delivered in fun, creative ways. Gifts say a lot about company culture.


The whole enchilada

Incentives, rewards and gifts add value to your Total Rewards mix and your total employee value proposition. Offer wide selection, personalise the experience, reinforce your values, support your brand and be generous with praise, thanks and recognition. Make the most of your investment by getting expert advice on what rewards motivate employees. There are lots of ways and opportunities to reward. And we’ve got all the ingredients you need to make a meal of it.


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