Steve is the cofounder and CEO of Awardco, a fast-growing rewards and recognition company.
In the ever-evolving landscape of the modern workplace, the concept of total rewards is taking on a new dimension. Traditionally, total rewards have encompassed financial and nonfinancial incentives offered to employees for their contributions. However, I believe it’s time to shift our perspective and reevaluate what truly constitutes a reward in today’s dynamic environment.
Shifting The Traditional Mindset
Let’s start by distinguishing between “reward” and “expectation.” A reward signifies something special, a token of appreciation bestowed for exceptional efforts. On the other hand, an expectation is something anticipated—it’s a given that people are confident will happen.
Consider the basics like equal treatment, respect and a secure work atmosphere. These are expectations, not rewards. They are fundamental aspects that every employee should rightfully receive. Likewise, compensation, health benefits and retirement plans are now seen as expectations. Employees expect these as part of their employment package, and organizations, if they want to stay competitive, provide them as a matter of course.
Understanding What True Rewards Are
True rewards, however, go beyond the basics. They encompass elements that make a workplace truly outstanding. Here are a few common examples.
• Abundant Recognition: Creating a culture of recognition, where peers celebrate each other’s accomplishments, is a genuine reward. It boosts morale and engagement and creates a positive work atmosphere.
• Professional Growth: Investing in employees’ growth through development opportunities is a reward that helps foster loyalty and satisfaction. Training, mentorship and skill-building initiatives empower individuals to excel and show that leaders want their employees to succeed.
• Wellness Emphasis: Prioritizing employee wellness demonstrates that you care about the individuals working for you. Work-life balance initiatives, extra flexibility, wellness programs and health support can contribute to holistic well-being and help employees stay healthy, engaged and productive. For example, Lifestyle Spending Accounts are great ways to offer funds for wellness that will regularly reward employees.
• Cultural Alignment: A workplace culture aligned with values and purpose is a reward in itself. A supportive, value-driven environment can foster collaboration and a sense of belonging. For example, at my company, we tie our values into our recognition program so that when an employee recognizes someone, they tie it into the value that fits the action. In my experience, this can help drive behaviors, reinforce your values and spread recognition.
Employees expect things like a sufficient salary and decent health insurance. But many don’t expect the above benefits, which makes them more rewarding when they’re offered. These benefits can help show that your company is willing to invest in your employees’ health, wellness and success.
Embracing Employee-Centric Change
I believe that modern total rewards strategies need to align with these distinctions. A paradigm shift in leadership’s approach is crucial to making this transformation. But what are some steps you can take to implement these changes in your workplace?
• Non-Monetary Improvements: Elevate your organization’s culture through cost-effective means. Train managers to offer recognition on a more regular basis, offer wellness programs and flexibility to allow employees to take care of their personal needs, and ensure each and every employee has a set path of growth so that they can learn the skills they’re interested in. These initiatives don’t necessarily require a significant financial investment but, in my experience, can yield substantial returns.
• Efficient Budget Allocation: Evaluate existing rewards and seek employee input. Reallocate resources to impactful areas, ensuring that every penny enhances employee experience. I recommend doing this by asking your employees—survey them to find out which existing benefits and perks are impactful and useful for them. Then, if you learn that an existing offering isn’t getting much use, find a better way to use that budget.
• ROI Focus: Employee recognition drives productivity and engagement, while professional development can boost job satisfaction. A balanced work-life approach can enhance well-being, and for many employees, a positive culture can outshine mere compensation. By showing the ROI of these employee-centric benefits, you can get the buy-in needed to revamp your total rewards.
A few shifts in budget usage and mindsets can make total rewards as rewarding as they’re meant to be.
Total Rewards Redefined
As we redefine total rewards, remember that compensation and traditional benefits cater to expectations, while meaningful recognition, growth opportunities, well-being initiatives and a supportive culture form the bedrock of true rewards. Investing in modern total rewards not only resonates with today’s workforce but also can differentiate your organization as a place where employees feel valued, motivated and empowered to thrive. If you want a workplace that thrives on boosting engagement, reducing turnover and building a culture of appreciation, I encourage you to explore the transformative potential of reimagined total rewards.
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