Tell them about it: use personal statements, training and online tools to let employees know how valuable their total rewards really are

HR Magazine, Nov, 2007 by Joanne Sammer

Health benefit costs keep rising, global competition soars, and many companies aren't in any position to increase their expenses or bump up employees' pay. But in top workers' eyes, pay can be a major factor in whether they stay: According to a 2006 survey conducted by Watson Wyatt Worldwide and WorldatWork, 71 percent of high-performing employees in 262 large U.S. companies said pay would be a key reason for leaving an employer.

So what's an employer to do? Try promoting rewards other than pay. Many employers already focus on the value of the "total rewards" they offer employees. Now, employers need to communicate those rewards to employees effectively so employees can truly understand--and appreciate--what they're getting, HR professionals say. Through personal statements, training and online tools, some organizations get the word out about total rewards.

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Quantifying Intangibles

After five years of communicating total rewards to employees, HR professionals at Children's Memorial Hospital in Chicago have seen significant improvements in workers' satisfaction with the value of the rewards they receive, according to Ellen Vebber, director of compensation, benefits and HR information systems (HRIS). The hospital sends employees an annual total-rewards statement with a breakdown of the dollar value of all benefits the hospital provides, from base pay to health benefits to mandated payroll deductions, Vebber says.

While definitions of total rewards and the contents of an employee's total-rewards statement can vary from organization to organization, the overall goals of generating total-rewards statements are to develop, manage and, most important, communicate all rewards programs as one comprehensive whole, employers say. A total-rewards statement can include anything of value that the company provides to employees, from the obvious--base pay, health benefits, bonuses and stock options, for example--to the less obvious, such as developmental opportunities, training, paid time off, work/life programs, performance incentive programs, long-term disability, state-mandated benefits, and even the organization's culture and work environment.

But can you really quantify intangibles like culture? Putting price tags on some aspects of culture is possible. For example, companies that promote their family-friendly attitudes can include the financial value of programs that contribute to that culture, such as paid parental leave, adoption assistance and on-site child care. Additionally, employers can use total-rewards statements to remind employees about programs and services designed to make their lives easier, such as take-home cafeteria meals, discounted movie tickets or wellness programs.

Keep communications about total rewards simple, advises Amy Litten, communications practice leader for Watson Wyatt Worldwide in Cleveland. "You want to repeat those messages over and over so that employees can absorb it," she says. This is especially important when company officials try to communicate the intangible elements of total rewards, such as the idea that the company values employees and their future. "The whole message goes well beyond just pay and benefits," Litten notes.

Building the Statement

An organization crafting total-rewards statements should start by getting as many different perspectives as possible, says Rena Lane, senior manager of benefits, payroll and HRIS for insurance company Aflac Inc. in Columbus, Ga.

You don't want the information to come from only compensation professionals, she notes. "All of HR should be involved, and it is a good idea to gather employee feedback and interview people throughout the company for their views," she says. HR professionals have insight into what employees are thinking, but they also should have the skills to design the statement, roll it out to employees and plan ongoing communication.

When it comes to specific communication strategies, get personal. The more information the company can provide that is specific to each employee, the more powerful that communication will be, says David Janus, a principal with the Charlton Consulting Group Inc. in Rockville, Md. Personalization is also important because not every employee is eligible for all available programs, such as long-term incentives.

At the same time, don't overload employees with data, Janus says. "Keep total-rewards information to a few pages with a summary and the key information clearly visible. A four-page format is ideal," he adds. The statement typically can include an introduction, a summary of the employee's total rewards, a graphic showing key information, and detailed information explaining the financial value of those total rewards for anyone interested.

Aflac began communicating its total rewards three years ago, and its statements have been evolving ever since. For example, this year the company added a pie chart illustrating for employees each program or benefit as a percentage of their total rewards. "We wanted to provide a visual for employees to see this, particularly the large percentage benefits represent," Lane says.