Why a Total Reward Program is Important
As the labor force becomes more highly developed and demanding, rivalry between organizations for talented employees is drastically increasing. It is extremely important that organizations make their company more enticing as an incomparable career opportunity. Instituting a total rewards system into an organization can do much to help it invite the paramount talent available and significantly condense turnover. The longevity of an organization’s employees is contributed to its total reward system. According to Heneman (2007), total rewards is defined as all of the tools, whether intrinsic or extrinsic, offered to the employer that may be employed to attract, motivate and retain employees. This could be monetary or non-monetary remuneration which includes not only compensation and benefits as well as personal and professional growth opportunities and a motivating work environment. Often times in the retail industry, especially among women consumers, shoppers will often times see a garment and it is sized “one-size fits all”. If the average female shopper buys the garment, they will soon discover “one-size fit all does not really fits all or it is not the fit they prefer. The tag should read “one-size fits most” instead of “one-size fits all”. If a garment sized this way does not always fit every consumer perfectly as initially planned, do you think a one-size fit all reward program fit all employees in the business industry? Because consumers comes in all shapes and sizes, the clothing retailers commonly offer an assortment of sizes, rather than a plethora of "one size fits all" garments. Organizations can learn a lot from the retail industry if they too would realize a total rewards package is being offered to a number of employees with different wants and needs and the "one size fits all" approach does not work when it comes to attracting top talent. Just as the clothing retailers realize to be successful they have to sell to different consumers, organizations need to implement different assortments of reward packages for different workforce segments (WorldatWork, 2007, p. 15 para. 1). According to WorldatWork (2007), there are five top advantages of a total rewards approach. These advantages of a total rewards approach includes increased flexibility, improved recruitment and retention, reduced labor costs/cost of turnover, heightened visibility in a tight labor market, and enhanced profitability. Increased flexibility is organizations acknowledging that it would be advantageous for employees to integrate their lives with their work. Workplace flexibility is an essential module of any organization’s attraction and retention strategy. Whether the employees are Baby Boomers, Gen X or Gen Y, recognizing flexibility in when, where and how they achieve their work obligations are significant dynamics in sustaining their motivation and loyalty to their employer (WorldatWork, 2007). Because of the struggling economy and an escalating populace of Baby Boomers heading toward retirement, employers are encountering major in recruitment and retention of top talent. According to Smith (2008), “a recent study shows 85% of HR executives state the single greatest challenge they have in managing the workforce is their organization's inability to recruit and retain good employees and managers (Smith, 2008, para. 1).” As an employee, I do not equate my self-worth in only monetary value but how my organization appreciates my contribution and my career growth within the company. A reward package that included a strategic plan for recruiting and retaining workers can show the potential employee(s) the organization’s career opportunities are just as vital as their monetary compensation. Retention and recruitment has a direct correlation with reduced labor costs/cost of turnover. If there was no turnover, no retention or recruitment strategy would be necessary for any organization. Turnover is...
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