Employees have become sophisticated marketers of their talent and wise consumers of the employment relationship. Following the advice of the popular press that encourages them to transform themselves into their own "brand," they are increasingly discriminating of the type of employment opportunities they pursue and the type of employers for whom they will work.

Employees want to ensure their jobs feed their professional ambitions as well as their need for other tangible and intangible rewards including competitive compensation, benefits, development opportunities and work culture. As a result, many organizations have introduced "total rewards" to capture the total value proposition of the work experience, and differentiate themselves as an organization to attract and retain talent. While many organizations have launched a model of total rewards, a fewer number have leveraged the rewards to their full advantage.

There are a number of ways in which to promote total rewards so employees positively appreciate the value proposition. Arguably, the most important lever is having managers who understand the model and have the commitment and skills to deliver on its promise. Many studies have shown that managers play a pivotal role in influencing employee opinion. In order to assess whether managers are strong ambassadors of the total rewards program, organizations can begin by asking the following questions.

Do Managers Understand the Rewards Model?

Managers need to understand the total rewards model to communicate it effectively to current and prospective employees. Managers need to have both a conceptual understanding and a technical understanding. On a conceptual level, they should understand how the model reinforces the employer's brand, and how it differentiates the organization from other employers. On a technical level, they need to understand the specific components and how to administer the rewards consistently. See The Total Rewards Model.

There are many technical aspects to a rewards model and managers need to have the correct information to answer questions accurately and apply policies consistently. Every piece of the rewards model has supporting principles or policies and managers should be intimately familiar with them to ensure they are "selling" them effectively and leveraging their value.

Managers need to be able to answer questions relating to pay and benefits. For example, on the "pay" component, many managers are not aware of the compensation package's total value, and that total compensation, in many organizations, is roughly 130 percent of their employees' base pay when the value of benefits, paid time off, training and company contributions to government programs are considered. This information is helpful when employees are dissatisfied with being paid less than independent contractors doing similar work, or when they are considering job opportunities in other organizations that may offer higher base pay but do not have other generous benefits. Similarly, on the "benefits" component, managers may not be aware of the options and eligibility requirements. For example, while many organizations have introduced flexible work arrangements, sabbaticals or education leaves, managers are often not aware of their options in structuring these types of arrangements.

Managers need a deep understanding of the model and rewards to speak with credibility and conviction about the value proposition. There is an opportunity for human resources professionals to provide formal education and communication to managers so they can understand and buy into the model, and have the credibility and confidence to communicate it effectively.

Are Managers Committed to Living the Model?

Senior managers set the stage for the success of the total rewards model. They demonstrate their commitment through their words and actions to promote the desired brand of the organization. For example, work culture can be a differentiating factor among employers and must be championed by the senior management team. They must "walk the talk" by being consistent in their model delivery to their own managers so that expectations are set for the rest of the organization.

Managers have the authority to facilitate or deny access to rewards. For example, their organization may have a generous budget for development, but if they do not support employees taking time away from work to attend courses, or put pressure on employees to repeatedly cancel their course registration because of work commitments, they are not truly committed to the model. Managers must demonstrate that they are committed to the model in order for the rewards to achieve the long-term benefits of employee satisfaction and retention.

As the expression goes, "What gets measured gets managed." Managers can be held accountable for the effective delivery of total rewards. For example, employee satisfaction surveys or multi-rater assessments are a good source of information to provide feedback on how well the model is being executed.

Do Managers Have the Skills to Deliver the Model?

Managers not only need to have an understanding and commitment of the model, they also should have the skills to execute it effectively. For example, organizations can state that they promote an innovative, team-based work environment but that is only a reality if managers have the skills to build collaborative and stimulating teams. False advertising of the rewards of work leads to employee cynicism and clearly undermines the intent of total rewards.

Organizations need to assess the ability of their managers to deliver on the promise of total rewards, and support them in developing the required skills. One way to accomplish this is to build behavioural expectations into their performance agreements, and assess their competencies in areas such as communication, leadership and coaching. Once these expectations have been identified and assessed, the organization can identify the skill areas that need to be improved.

Execution is Key to Success

In order to reap the benefits of total rewards, organizations should recognize that the careful design of the model is just the beginning. The model's execution is what differentiates organizations that have enhanced their ability to attract and retain talent from those that have not. Managers have a pivotal role in the success of total rewards because they have such strong influence over how the model is executed. As such, they need to understand the model, be committed to its value and have the ability to deliver on its promise. Managers must take an active role in selling the rewards model. If not, it should come as no surprise when their employees accept the offer of more attractive suitors.

The Total Rewards Model

Total rewards is simple in concept and at best complex in its execution. Yet, organizations that understand the concept as it affects their industry and competitive environment -- and deploy critical factors to their strategic advantage -- will be the clear winners in the battle for talent.

Total rewards has three main components:

• Compensation
• Benefits
• The work experience

Compensation and benefits are the two core components of total rewards. In every organization, there is some overlap of these components; the degree of overlap depends on organizational culture and program design for the intended impact. Each area has a distinct and unique body of knowledge. Individually and jointly, these components can offer tremendous strategic advantage and impact.

The third and overlapping component of total rewards is "the work experience." Whereas compensation and benefits have clearly defined bodies of knowledge that are maintained by well-established professions, "the work experience" includes the many elements of rewards that are important to employees and employers today but many times are less tangible. They overlap, relate to and sometimes integrate with compensation and benefits.

To learn more about the total rewards model go to the WorldatWork site and click on "About Us" and "What is Total Rewards."

Sue Nador is a partner with NVision Consulting Ltd. She can be reached at sue@nvisionconsulting.ca and
416.466-3010.

Originally published in CanadianNews, first quarter 2003, with permission from WorldatWork, 14040 N. Northsight Blvd, Scottsdale, AZ 85260; phone (877)951-9191; fax (480)483-8352; www.worldatwork.org. © 2003 WorldatWork. Unauthorized reproduction or distribution is strictly prohibited.