Total Reward is a human resources model that aims to take into account all the benefits, both financial and otherwise, of working for an employer.
Rather than just focussing on the tangible or financial benefits of employment, such as salaries and pensions, Total Reward also considers other elements like training and development or work-life balance that help manage and motivate employees.
Advocates claim that the model helps engage employees in the company culture, driving up performance, and the government is increasingly keen to promote its use within local government, as part of a drive to modernise reward packages for council employees.
Prior to the roll out of Capital Ambition’s Total Reward Project, London local government had tended to focus on the production of total reward statements based on renumeration packages.
However, Capital Ambition felt that the benefits of producing these statements were limited. Instead, it wanted to see London boroughs embedding a total reward management philosophy which would enable them to really understand what motivates people at work and what elements of the reward package employees value and why.
Commissioned research
Capital Ambition commissioned the Institute for Employment Studies to undertake a project which could develop a framework using total reward principles. This will now be used to help individual boroughs develop their own comprehensive reward strategies.
One London borough was chosen to pilot a total reward approach. The reward manager at the borough explains that the council felt this was a great opportunity to find out what employees wanted in terms of reward.
“The nub of the project was trying to establish answers to the questions: why did you join the organisation, why are you staying, what’s good about it and what would make you leave? It’s important to establish exactly what people are looking for and what they want to get out of the organisation. There’s no point in throwing more salary at people if what they want is actually more training and development.”
The council ran eight focus groups, covering distinct groups of employees such as senior managers or clerical staff. This produced qualitative data indicating what employees valued about their reward package.
It also launched an employee survey to collate additional quantitative data on employee attitudes to reward.
Survey results
The messages revealed by the data indicated that different types of employee valued different types of reward. Senior managers, for example, place a lot of emphasis on challenge within their role, whereas lower graded staff valued job security and positive recognition from customers rather than managers.
“In talking to the senior management group, we found they stay because they find the work stimulating – if they didn’t, they would walk” says the borough’s reward manager. “Their loyalty isn’t really to the organisation, it’s to the challenge and development of their career.”
In light of these findings, the borough is now considering offering senior management a higher proportion of variable pay, such as a performance bonus, as part of their renumeration package.
The results will now be used to inform a reward modernisation programme at the borough. The long-term goal will be to produce a segmented reward package over the next year, informed by the research undertaken with employees.
To find out more about Total Reward, contact: Peter Thomas
Additional information can be found on the project's webpages
