According to WorldatWork (2007a), the creation of a total rewards program can be divided into six steps: Analyze, Design, Develop, Implement, Communicate, and Evaluate. In a visual form, those steps can be represented by the following diagram (see Figure 1).
Figure 1. Creation of a total reward program. This figure illustrates six steps in creation of a total reward program.
The figure shows the logical sequence of actions needed to devise and implement a total rewards program in an organization. First, the general business strategy should be analyzed to obtain a foundation for a total rewards strategy. Second, designing the total rewards program involves defining its goals, as well as assessing the existing total rewards program, while also taking into account workforce segmentation (Kaplan, 2005). Third, a total rewards roadmap and a compensation philosophy can be developed, including a rewards portfolio for attraction, motivation, and retaining different types of employees. Fourth, the total rewards program should be implemented through a series of steps to be in line with people and business strategies. Further, communication is crucial to incorporate a total rewards program into company’s culture, with management support being important at all levels. At this step, effective communication would include multiple methods – such as newsletter, presentations, and Web sites – while being based on simple and focused messages, repeated several times for better memorization (WorldatWork, 2007b). Finally, the impact of the program should be evaluated, while the program itself has to be continuously monitored for compliance with business objectives, mission, vision, and values; the feedback from employees can be also useful in making the program more effective. In case of necessity, the program can be further revised, which brings the cycle back to the first step.
Therefore, through the six steps described above, organizations can develop an efficient total rewards program for further strengthening of their competitiveness in the market.
Kaplan, S.L. (2005). Total Rewards in Action: Developing a Total Rewards Strategy. Benefits & Compensation Digest, 8, 32-37.
WorldatWork (2007a). The WorldatWork Handbook of Compensation, Benefits & Total Rewards: A Comprehensive Guide for HR Professionals. Hoboken, N.J.: John Wiley & Sons.
WorldatWork (2007b). Reward Programs: What Works and What Needs to be Improved. Retrieved from http://www.worldatwork.org/waw/adimLink?id=21744