Incentives, Rewards and Recognition Have No Place in a Total Rewards Statement

Total Rewards - the need to show employees all the things the company does for them.  A statement of the companies largess so to speak.  A single page of ALL the things the company provides to employees with nice graphs, pretty pie charts and numbers and percentages.  A PR statement that says "Look how good you've got it!  We are treating you right.  Please don't leave and please work harder."

Does anything say "pathetic" louder than that?

As I read all these articles talking about including rewards and recognition in the total rewards statement I can't help but think this has gotten so one-sided.  Since when did companies get so needy that they have to show the employee all the great things they do for them?  Is it because it was so one-sided in the past, where employees were treated poorly and taken advantage of?  Is this some sort of guilt-assuaging task that companies need to do in order to feel good about asking for an even exchange of work for pay/benefits?  Or have employees gotten so stupid as to not understand all the expenses that go into keeping them employed?

It's not a Total REWARDS Statement!

Very few items on the total rewards statements I see are really rewards.  They are the minimum benefits the company feels are necessary to attract and retain the appropriate talent to fulfill their mission and goals.  It's not a reward statement.  Calling it a rewards statement is just massaging the language to give it good PR spin.

I might go along with a "statement" of employee expense since many costs are hidden from the employee (or at least difficult to divine from pay stubs.)  I think that would be a good way to communicate the "investment" the company has in the employee who shows up and does their job as specified in the job description.

But I don't think that rewards and recognition opportunities are part of that expense - they are variable expenses driven by the employee - not the company.  If employees don't excel there is no cost therefore it wouldn't show up in their "total rewards" statement.  Those expenses are not dollars the company gives to employees they are dollars the employee earns from the company.

Why Recognition Shouldn't Be Included

In most cases recognition of a job well done should be a standard operating procedure - just good manners and good business.  I don't see how that becomes a line item on a total rewards statement.  Isn't that good management?  When did good management become a "perk" to highlight in a statement.  To me that is just a given.  Including recognition in a total rewards statement is like including "being nice to your spouse" as a bonus in the marriage contract. Even a strategic program with formal rules and processes that links to company mission/values is variable.  If employees don't meet the criteria - no cost (and a huge problem for the company.)

Why Non-Cash Incentives Shouldn't Be Included

Incentives outside the compensation arena shouldn't be included simply because those are not benefits of working at a company - they are incentives for working HARDER or working differently at a company.  If an incentive is included in the total rewards statement it communicates that the company is "giving" these awards - not the employee earning them.  To me it devalues the incentive and sets up a situation where all employees feel they are owed these incentives.

Should There Be Two Statements?

Here's a thought - maybe we should do two statements.  A total "expense" statement that shows how much the company has invested - and highlights the standards the employee must meet in order to keep that exchange in balance.  In addition, there is an "opportunity" statement that lists all the different ways the employee can earn additional perks/awards, etc. for growing and exceeding in their position and career.  

I think two statements communicate a much different picture of the exchange between the company and employee.  Two statements communicate the real relationship - one that has two sides, one that has commitments from both parties - one that shows the employee as a giver (of time, talent and intelligence) AND the company as a giver of benefits and money.

Co-Dependent No More

I may just be in a bad mood because I'm inundated with information about how employees are getting screwed left and right and the company as this big, bad wolf taking advantage of the worker (hammer and sickle anyone?) I think we're fostering a co-dependent relationship between companies and employees that won't turn out too well.  As long as companies feel guilty asking for minimum work effort and employees feel deserving of awards for minimum effort we'll continue to watch performance dwindle.  

Let's break the chain - specify investment for "being there" and outline rewards for "being better."

A well-run company, with a good "expense/investment" statement and a good "opportunity" statement would look much better to me than a company that inflates their true investment in employees by including all the costs associated with variable employee effort as if all employees receive that money/cost.  To me its just a bit duplicitous.

Set up separate statements and I'll bet you'll see a different reaction.

 

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Comments

[Jon Ingham]

Paul,

Interesting post and here are some thoughts in response.

I don't think it matters whether there is one or two statements, but I agree that a broader statement(s) needs to be supported by a two-way review of the employment relationship.

We know retention depends largely on rational vs emotional engagement, ie a fairly logical analysis of whether the organisation is acting in an individual's best interest.

So a smart organisation is going to want to articulate all of the total rewards and other engagement factors it has offered.

However, at some stage, this has to go beyond a formal document, and becomes part of a two-way conversation with a line manager (a two-way deal management discussion vs a one-way performance management one).

By the way, I think recognition plays a similar role to this (at least the 'thank you' vs the best sales people trip to Hawaii type). So I agree this doesn't need to form part of the statement (it's part of the statementing vs part of the statement).

[Paul Hebert]

I think your point about the "logical" vs. "emotional" connection is valid and important. In fact maybe the real split should be a statement that is designed to split that dynamic vs. them and me? In other words a statement that shows the rational reasons and one that shows the emotional ones? Is that even possible.

The bigger point I was trying to make is that I'm feeling that we've gotten a bit out of balance and that employees are no longer seeing a two-way relationship but more of a one-way - gimme, gimme, gimme. Two statements that separate out the "what we give for minimum" and "what you need to do for maximum" establishes that there are two sides to this from the git-go.

And again you bring up a very good point and one I've been harping on a lot lately - MANAGERS need to manage this stuff! Systems, programs, forms, etc DO NOT take the place of quality management. We're losing that skill set - if we ever really had it.