Nothing motivates employees more than money, that’s what conventional wisdom has taught us. This is not true anymore and as Maslow’s hierarchy of need suggests, safety (generally provided by money) is still below love, esteem and self-actualization which means that even though safety is very important its not the primary motivational factor . So how can companies satisfy employee needs at the apex of the triangle? Managers can do this by developing and demonstrating the strength of total rewards and not total compensation to employees. They should take small but quick steps to reach there keeping employees excited and motivated.
Total compensation is collection of total cash and stock award payments. It shows the explicit benefit of performing at your job. It demonstrate the safety net that the company has developed for the employee so that they can nourish themselves and live a comfortable life style. This ensures that employee can concentrate on their work and not worry about bills to pay. Some employees and managers consider it also as cost of the job performed but total compensation is just part of the total cost. Total compensation just helps an employee to concentrate which means that the employee is driven to come to work, sit at his/her desk, clock his time, complete work to best of his ability. This subset does not ensure motivation. Some might argue that companies now offer short term and long term incentives based on past and future performance to induce motivation but more than often these incentives lead to short term profit taking, date based result sprints and not total capability development. This is a good place for start at but management need to do more.
Total remuneration is synonymous to total compensation is many respects but differs a little bit because it demonstrate some of the hidden cost associated with the job that were not visible previously. Total remuneration is a collection of the benefits offered and employer contribution to those benefits. benefits can include medical and retirement benefits, and paid time off. Total remuneration is still monetary in nature and hence even though it elevates the employee the within the security realm, it still does not break through to the higher level of needs.
Total reward provides the complete picture. It not only encompass the total cost of performing a job but it also include the long term value addition and true human capital value. Companies generally include training and development cost, company charity matching cost etc along with total remuneration to create total reward. In my mind total rewards is more than just monetary part. It should hit the top three segments of the Maslows hierarchy. It should show an employee how working for the organization has increased the self-esteem (growth in organization, potential for next promotion, current potential and performance), created new relationships (display number of connections, rank connections and show sponsors and mentors) and enhance creative side (number of different projects worked on, number of projects self started and org promoted, group contribution, group rankings). These non monetary rewards are more motivational for employees than monetary rewards. Hence, total rewards should not be measure by total dollar but total value that the employee gain from an organization ,which is difficult to replicate by others.
