professionals say that lack of leadership support and buy-in is
the greatest challenge towards creating a total rewards philos-ophy.
Differing opinions on rewards came in as a close second
in terms of barriers to creating a philosophy at 32 per cent. Of
the remaining 18 per cent, respondents said their workload held
them back, while 14 per cent said they didn’t know how to cre-ate
These results are telling. While HR may be fully aware of the
importance of a total rewards philosophy, other business lead-ers
may not understand its full value. Moreover, the second most
cited challenge – differing opinions – showcases how challenging
it is to take a unified approach to total rewards. Indeed, achieving
alignment and developing a philosophy that resonates with leader-ship
and employees alike can be difficult. Nonetheless, reconciling
these differences to develop a total rewards philosophy is impor-tant,
as it serves some distinct purposes.
An organization’s total rewards philosophy is used to:
■■ Align the company’s mission, values and objectives to
■■ Attract, retain and motivate employees.
■■ Determine how pay impacts employees.
■■ Provide a clear, direct statement and commitment.
■■ Reinforce alignment between rewards practices, HR and
■■ Initiate discussions concerning compensation and rewards.
The total rewards philosophy can also be used to determine:
■■ Where an organization targets and pays out rewards.
■■ How to balance the various elements of total rewards.
Moreover, in terms of attracting and retaining employees, the
rewards philosophy is a critical piece in developing a unique and
compelling Employee Value Proposition. It is a foundational piece
on which effective processes can be built and is a critical element
of a business strategy.
There is a commonly-held assumption that all organizations are
looking to be competitive, fair and equitable in their compensation
practices, but that’s not necessarily true. Moreover, often these
goals contradict each other. Determining what’s most impor-tant
to your company is a key piece of the puzzle when defining
When discussing a rewards philosophy with stakeholders, con-sider
the following questions:
■■ What should a rewards program do to help the
■■ What is the organization’s capacity to pay? What are the
restraints on that capacity?
■■ Are we seeking to be fair, equitable and/or competitive? How
will these principles be demonstrated?
Answering these questions will help to shape your total
Of course, certain factors should not be overlooked. Pay equity,
for one, demands up-to-date knowledge on relevant legislation
so a company can manage its risks proactively. Oftentimes, wage
inequality is an act of omission, not a deliberate decision. If a com-pany
pays people in similar jobs differently, make sure there is a
legally defensible reason for doing so. Factors such as varying edu-cation
levels and tenure can back up differentiated pay, but it’s
important that these factors are documented.
Developing and implementing a total rewards philosophy is one
of the best endeavors an organization can pursue. It is a key element
of an overall business strategy and plays an important role in com-municating
an Employee Value Proposition. While the process of
developing a total rewards philosophy will require some thought-ful
planning, it is possible to reconcile different opinions, achieve
alignment among business goals and the approach to rewards, and
devise a philosophy that’s relevant to a company’s workforce by fol-lowing
the basic framework laid out in this article. n
Kathleen Jinkerson is a practice leader, HR and Total Rewards
Solutions at The Talent Company. Attend her presentation,
“Innovation in Total Rewards,” on Feb. 1 at noon.
OF COMPANIES HAVE
SOME FORM OF A
PHILOSOPHY IN PLACE.
magurok / 123RF
56 ❚ CONFERENCE ISSUE 2019 ❚ HR PROFESSIONAL