Summit news: Employers should tailor total reward to fit

Employers should avoid striving to adhere to best practice around total reward strategies, and instead look at the best fit for the concept to their organisation.

Speaking in the opening session on day two of the Employee Benefits Summit in Jerez, Michael Armstrong, author of A handbook of employee reward, warned delegates: “At the corporate end, there’s a real danger in looking around for best practice. Best fit is better than best practice.”

He added that, in many cases, total reward is sold as a package to employers, but this is not the best way to approach it. “Total reward is a philosophy rather than a technique. It has become a bit of a consultant’s package. I’m suspicious of packages as these smack of best practice.”

A number of consultants have developed total reward models on which employers can base their own approach to the concept in line with their organisation’s needs.

Key elements of total reward include pay and benefits, but others include learning and development and the working environment. Unilever, he said has defined total reward as being about “what it means to come to work”.

“Total reward is a bit of a fuzzy concept perhaps,” said Armstrong. The key for employers though he said was to define what they wanted to achieve through total reward and to work out a way of implementing it “as a total and coherent whole”.

Employers should also identify what people value and how they obtain added value for these employees.
To gain the maximum effect from a total reward strategy, employers must ensure that they fully engage line managers with the concept in order to utilise their skills when communicating with the workforce. “A lot of the total reward concept really depends on line managers. HR managers propose, line managers dispose. Unless [line managers are engaged] a lot of what HR does will be wasted,” concluded Armstrong.