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The Empuls Glossary

Glossary of Human Resources Management and Employee Benefit Terms

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Total Rewards

Total rewards is a term that refers to the total financial and non-financial rewards that an employee receives in exchange for their work. It includes base pay, bonuses, stock options, profit sharing, retirement plans, and health care benefits.

Total rewards programs are designed to help employees feel appreciated while motivating them to stay with the company and perform well. They also serve as a way for employers to attract high-quality talent when competing with other companies for workers with specialized skills or talents.

What are total rewards in HR?

The total rewards approach to HR is a comprehensive, strategic and systematic process that combines all the elements of an organization’s employee value proposition. It takes into account all aspects of employment that have an impact on people’s lives — financial, non-financial, and personal.

Total rewards aim to create an integrated approach to all human capital management activities that align with the organization’s business strategy and generate superior results over time.

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What are the benefits of the total reward strategy?

Employers, who adopt a total reward strategy, can expect to gain the following benefits:

  • A positive workplace culture
  • Higher employee retention rates
  • Higher levels of employee engagement 
  • Increase productivity levels
  • A reduction in recruitment and training costs
  • Attract and retain high performers

Why are total rewards important?

The importance of total rewards lies in the fact that they can be a deciding factor in whether a candidate chooses to take a job or not. An attractive total rewards package can help attract top talent to your company while keeping existing employees happy and loyal to your organization.

The idea is that if you can offer your employees more than just a paycheck, they will be more engaged in their jobs and stay with your company for longer.

What are the components of total rewards?

The components of total rewards include:

  • Pay: This includes base pay, overtime pay, and commission.
  • Benefits: These are any non-cash compensation an employer provides, including health insurance, life insurance, and retirement savings plans.
  • Perks: These are additional non-cash benefits beyond those usually provided by an employer, such as free parking or subsidized cafeteria meals.
  • Health insurance and retirement plan contributions: Medical insurance and retirement benefits are often among employees' most valued benefits.

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How to create a total rewards statement?

A TRS (Total Rewards Statement) should include information about every element of your employee's compensation package: salary, bonuses, benefits and perks, pension plans, and so on. The statement should also include a breakdown of how they compare to those offered by your competitors.

Here's what TRS should include:

  • Salary
  • Sick leave
  • Vacation time
  • Bonuses and incentives
  • Health benefits (medical and dental)
  • Retirement benefits (401k, pension)

What are the examples of spot awards for employees?

Here are some examples of spot awards for employees:

  • Spot bonuses: An easy way to reward employees for a job well done. 
  • Spot prizes: An item you give away as a reward. 
  • Spot recognition: A great way to recognize your employees' achievements.
  • Spot cash award: A great way to reward someone for their good deeds.
  • Spot gift certificate: A great way to say thank you. You can give it as an incentive or use it as a reward for good behavior (such as attendance).

Employee pulse surveys:

These are short surveys that can be sent frequently to check what your employees think about an issue quickly. The survey comprises fewer questions (not more than 10) to get the information quickly. These can be administered at regular intervals (monthly/weekly/quarterly).

One-on-one meetings:

Having periodic, hour-long meetings for an informal chat with every team member is an excellent way to get a true sense of what’s happening with them. Since it is a safe and private conversation, it helps you get better details about an issue.


eNPS (employee Net Promoter score) is one of the simplest yet effective ways to assess your employee's opinion of your company. It includes one intriguing question that gauges loyalty. An example of eNPS questions include: How likely are you to recommend our company to others? Employees respond to the eNPS survey on a scale of 1-10, where 10 denotes they are ‘highly likely’ to recommend the company and 1 signifies they are ‘highly unlikely’ to recommend it.

Based on the responses, employees can be placed in three different categories:

  • Promoters
    Employees who have responded positively or agreed.
  • Detractors
    Employees who have reacted negatively or disagreed.
  • Passives
    Employees who have stayed neutral with their responses.

What is the total reward package?

The total reward package is the combination of all the rewards that an organization offers its employees. Total rewards include more than just cash compensation. They also include health care benefits, retirement plans, vacations, personal time off, and other non-cash benefits. The term "total reward" refers to both monetary and non-monetary rewards.

What total rewards strategies increase employee engagement and retention?

The Total Rewards strategy should be based on the organization's business objectives. It should align with the company's vision and mission statements and complement its strategic business goals.

The total rewards strategy should also be aligned with:

  • Workplace culture and values (including the organization's "brand")
  • Workforce demographics (including diversity)
  • Compensation trends (for example, pay-for-performance)
  • External market conditions (such as new technology)

What is total reward management?

Total Reward Management is the process of developing and implementing a comprehensive compensation and benefits strategy, which includes both pay and non-pay components. It consists of all aspects of employee rewards such as salary, bonuses, benefits, perks, advancement opportunities, and more.

How to communicate total rewards to employees?

To effectively communicate total rewards, organizations should:

  • Make sure all communication materials are straightforward to understand.
  • Use multiple channels, such as meeting face-to-face or through online communication tools, social intranet, or video conferencing.
  • Provide information tailored to each employee's needs. For example, some employees may want more detail on benefits structures, while others may want more information about their performance ratings.
  • Use a comprehensive and up-to-date employee handbook containing all employment aspects, including overtime pay, working hours, paid leave, workplace conduct, termination procedures, and health insurance.

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