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Total Rewards Integration: How to Ensure a Smooth Takeoff and Landing

Smooth-Takeoff-and-LandingEarlier this year we covered how a huge 83 percent of organizations lack direction for integrating total rewards, and we outlined some basic steps for beginning the total rewards integration conversation.

Indeed, virtually all HR leaders (95 percent) see the value in integrating total rewards within itself, with other parts of HR, and with the broader business.  Senior leadership outside of HR has also shown an interest in ensuring total rewards are managed effectively.  In fact, at nearly two-thirds of organizations, senior executives are involved in decisions for total rewards offerings.

And total rewards isn’t just getting attention from the top – when managed effectively, it’s proven to yield gains in critical talent outcomes.

  • Year after year, top talent worldwide consistently cite total rewards as crucial to their engagement.
  • Furthermore, improving employee perceptions of total rewards can impact Intent to Stay by as much as 34 percent and Discretionary Effort by as much as 15 percent.

Still, 90 percent of organizations are planning major changes to their total rewards programs because while the potential for impact exists, few have realized any major gains.

CEB research shows that organizations are usually more likely to achieve their total rewards goals when they integrate total rewards more, especially the upfront stages.  Successful organizations are much more likely to create integrated strategy and goals, and integrated functions.  On average, successful organizations undertake several more steps towards total rewards integration than unsuccessful organizations.

Organizations have choices on both timing and planning methodology of the rollout of total rewards.

If the need for total rewards is urgent, resources are available, and the organization is ready to manage resulting change, consider a Simultaneous Rollout, in which total rewards are rolled out to the entire organization all at the same time.

However, if there is little urgency around implementing total rewards, resources are scarce, the organization is not ready to manage resulting change, and the organization is generally risk averse, consider a Staged Rollout.  A Staged Rollout involves first rolling out total rewards to one specific part of the organization (e.g., region or function), and roll out more broadly over time, making sure to apply learnings from the initial rollout.

When it comes to planning methodology, if the need for total rewards is urgent and there is a drive for plan uniformity and process consistency, but the organization is not ready to manage change, consider Top-Down planning.  When Top-Down planning, you determine the strategy and approach centrally and make (small) “local” adjustments as needed.

However, if there is little urgency around implementing total rewards, the organization is ready to manage resulting change, and plan uniformity and process consistency aren’t high priorities, consider Bottom-Up planning.  Bottom-Up planning allows for different parts of the organization to define their own approach and implementation path to total rewards.

CEB can help you build a total rewards strategy and design, assess employee preferences for total rewards, and communicate about total rewards with key stakeholders.  CEB Total Rewards Leadership Council members can access best practices, implementation support, and insight on their member website.  Prospective members can download a complimentary copy of our newest research on total rewards integration from cebglobal.com.

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