Peter Reilly: Total reward goes beyond basic benefits

Total reward goes back a long way to when Adam Smith first referred to it in the 18th century. Its more recent popularity comes from use by management consultants seeking a new way of engaging practitioners in how to motivate employees.

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The key point of total reward is to look beyond the obvious extrinsic benefits of salary and bonus, and to the intrinsic motivators of job satisfaction and pride in the organisation. The point is to give a more rounded, more complex picture of what attracts, retains, motivates and demotivates staff.

Think of total reward in terms of the model the Institute for Employment Studies (IES) uses, adapted from US consultancy Schuster and Zingheim, which outlines that an attractive organisation has a good vision and values to create a positive brand. What attracts is not necessarily the same as what helps retain, and motivation and especially demotivation factors may also differ.

A word of caution, though: many people use the term total reward to just describe total reward statements (TRS). Although these are useful, TRS fail to capture well, if at all, those intrinsic aspects that at times are the essential connection between employees and their employer.


Peter Reilly is director, HR research and consultancy at the Institute for Employment Studies