1.1Introduction to Total Rewards
Define Total Rewards strategy.
Describe major laws governing employee compensation
Identify the relationship between state and federal laws regarding pay.
Describe the importance of evaluating pay systems.
Do you want to make a deal? Organizations do. Organizations make deals with people, and people make deals with organizations. This course will provide a basic understanding of the types of deals that organizations and employees make and the role that Total Rewards play in those deals. Organizations have a job to do. People have needs to be met. The employment relationship is an agreed-upon basis for organizations and people meeting each other's needs. Organizations get work done through people and people have choices. People can choose to be a part of one organization, or they can choose to leave it for another. Similarly, people can choose to dedicate their time and abilities to other pursuits outside of any organization. Managing Total Rewards is a story about how to make sure that the rewards offered by an organization meet both parties' needs. If they do, then, from a rewards perspective, we have a deal!
Defining Total Rewards
What's in it for me? That is the question asked by both companies and employees (or potential employees). The best way to answer that question for employees is to use a Total Rewards approach. So what is a "Total Rewards" approach to paying employees?
Total Rewards refers to all forms of pay and compensation, tangible benefits, and other intangible rewards that an organization provides. When using a Total Rewards framework, the paycheck that an employee receives is considered, but also Cash Compensation must be recognized and is only one of the forms of rewards that employees receive as part of the employment relationship. There is more to this deal. Total Rewards also includes Employee Benefits, such as a retirement plan, which are an important part of the deal. Once again, however, Cash Compensation and Employee Benefits don't fully explain employees' willingness to join, remain with, and contribute to an organization. There are additional Intangible Rewards that employees receive from working at the company. These include such things as meaningful work and rewarding relationships, and they also play a role in the formation of the deals that allow employees and organizations to join forces. These three elements are shown below connected by arrows to signify that the three forms of rewards act in concert to influence employee behavior. For example, the amount of Cash Compensation influences employee perceptions of support and supportive management influences views of Employee Benefits. The Total Rewards perspective will allow employees to consider each of the components independently, but also collectively, enabling them to create an effective reward system.