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Talk up total rewards to improve engagement

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in Compensation and Benefits,Human Resources

There’s a strong correlation between employees’ perceptions of their total compensation package and their degree of engagement at work, and employers can strengthen that connection by communicating exactly how much employees’ pay and benefits are really worth.

That’s the conclusion of a new study by the Aon Hewitt consulting firm, which found that 60% of engaged employees say their total rewards—everything an employer provides to an employee, including pay, benefits and the work environment—are above or well above what other employers offer. Only 24% of those who are disengaged say so.

Similarly, 51% of engaged employees view their organizations’ career development and training programs as better than what other employers offer; only 19% of disengaged employees do.

Those differences matter in an environment in which rising health benefit costs and relatively flat wage increases have made many employees cynical about their work.

“While we consistently see employees ranking pay as the most valuable reward they earn from their employer, it’s not the only thing that matters,” said Ray Baumruk, Aon’s employee research leader. “Engaged employees value a more balanced, less oriented toward pay-only, rewards package compared to those who are disengaged.”

Employers can improve engagement by doing a better job of explaining their total rewards practices. “Often, providing total rewards statements and related Web tools can help foster greater understanding,” said Pam Hein, an Aon communications consultant.

The study found a significant gap between the communication perceptions of engaged and disengaged employees. Among engaged employees, 77% feel encouraged to share ideas. Only 22% of disengaged employees agree. Similar gaps exist when considering how open and honest senior leaders are viewed, and how managers share and provide information with employees.

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