Developing A Holistic, Purpose-Driven Rewards Strategy

Not that you haven’t noticed, but there’s something going on with today’s labor force that is shifting the paradigm for businesses everywhere. Due largely to the ongoing pandemic, what employees need and expect from their employer is evolving. 

To wit, according to a recent Mercer global trends study, 36 percent of employees prefer working for an organization that prioritizes social equity and environmental protection. What’s more, 37 percent are motivated by strong corporate values, mission, and purpose, and nearly half favor companies that protect employees’ health as well as their financial wellbeing. In short, employees these days have more leverage in terms of where and how they want to work, and what they expect their employer to care about.

All this calls for a reimagining of your employee rewards strategy to help you work your way through uncertainty and build much-needed agility. It’s vital that you’re able to pivot if, and when, things change. The good news is that there’s no better time to handle all this as during disruption. Since your hand is now basically forced, you may as well take the time to develop a holistic, purpose-driven rewards strategy that improves the employee experience and helps you attract, retain, motivate, and engage talent. Read on for more about what this means.

What is Meant by Employee Rewards?

Employee rewards are incentive plans established by organizations to reinforce desired employee behavior and to reward employees for their membership. The main goal is to be able to attract and retain top talent. The rewards can be monetary or non-monetary, including opportunities for personal growth and professional advancement.

What are the Benefits of an Excellent Rewards Program?

In addition to improved recruitment and retention, the benefits of a solid total rewards program include:

  • Heightened productivity and engagement
  • A drop in employee turnover
  • Improved employee satisfaction
  • A better organizational culture
  • More loyal and satisfied customers
  • Decreased stress and absenteeism levels    

What is Meant by Employee Experience?

Essentially, the employee experience crystallizes what an employee views and perceives during their tenure at an organization, from their candidacy onward.

Why is the Employee Experience Important?

The benefits of a positive employee experience largely mirror those of a superior total rewards plan. Do you see the correlation now? In any case, those employee experience benefits include:

  • Increased engagement and production. Did you know that disengaged employees can cost organizations billions due to decreases in productivity and commensurate increases in absences? Well, it’s true. On the other hand, engaged staffers produce more and tend to stick around.
  • Less absenteeism. You don’t relish showing up if you don’t feel appreciated or are otherwise unhappy with your workplace, do you? It’s human nature, but absenteeism also affects employee morale overall as well as the organization’s bottom line. Happy employees come to work — and work harder and better.
  • Better work quality. What’s more, happy employees tend to be more creative and innovative. Since they aren’t focused on any bothersome and lingering workplace negatives, they can home in what you’re paying them to do – and then some.
  • Better customer relations. That’s right, the employee experience touches all aspects of your organization, including the customer experience. It’s not rocket science: employees’ moods, for better or worse, spill over to customer interaction. Such employees tend to go the extra mile, where customers are concerned, and in addition, these employees are more apt to learn their company’s product or service through and through, which makes them more supportive to customers. 

What are Central Features of the Best Reward Strategies?

Nowadays, the most effective and inclusive rewards plans are steeped in data and analytics and align pay and performance with purpose. To craft a compelling rewards strategy, you must utilize analytics to understand your employees, shutter skills chasms, and fortify employee engagement and retention.

At the same time, you must build in agility by putting in place a job architecture that lines up pay and benefits with positions, career trajectories, and labor markets.

You know that remote work has become a thing. So, to get the best return on incentive investments, you must heighten your employee performance and adaptability while fostering flexibility and inclusion by using the digital and remote models that are increasingly prevalent today.

Why is All This Change Coming About?

As we say, the coronavirus pandemic is a huge part of it. There’s also renewed interest in how organizations are responding to calls to address pay inequities, systemic racism, and other social issues. Employees are demanding more organizational responsibility.

Why is Aligning Rewards with Purpose and Business Performance So Important?

Well, check out more about what that Mercer survey found:

  • For CEOs who are accountable for governance, social, and environmental efforts, three of four of the companies they lead have growth rates of at least six percent.
  • One in three employees favor companies that demonstrate responsibility toward 100 percent of stake holders – not just some.
  • Employees that are prospering in areas of health, their finances, and their career – this is known as “thriving” – are four times more likely to be employed by an organization that they view as ensuring equity when it comes to decisions regarding equitable compensation and career advancement. 

The fact is that organizations that are devoted to a measured, purpose-driven total rewards strategy will have a holistic mindset when it comes to every element of total rewards. In turn, this promotes a culture of transparency and access for all employees.

All told, developing a holistic, purpose-driven rewards strategy is more than a notion. You must be intentional about it, which means getting outside help if you think you need it. A consulting firm such as Mercer can handle this with expertise and without disruption, freeing you to attend to the day-to-day needs of running a business. In any case, don’t get caught flat footed. Organizations everywhere are shaking things up, and to remain competitive, you must be in that number.   

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