Communicating total compensation to employees in a meaningful way


Each year, one way that organizations communicate to employees how much they value them is through total compensation statements. Most often distributed after the chaos of the annual open enrollment process, total compensation statements provide a tangible, written document for the benefit of employees. From health, life and supplemental benefits to performance bonuses and all the other unique perks of working for a company, the total compensation statement supplies employees with a full overview of the benefits that a company provides – in the hopes that this will be meaningful to them as they head into the next year of employment.

Why Promote Total Compensation?

The main goal of using a total compensation strategy is to demonstrate to employees how much their efforts matter to the company, with the expectation that this will foster good will and improved productivity among a happier workforce. Likewise, competitive compensation statements can be used for recruitment purposes, to show candidates how the company treats employees by sharing the full scope of the benefits and compensation program. Our 2013 Compensation Best Practices Report advised that employee retention is one of the biggest concerns of employers today, with 59 percent of those surveyed worried about losing their best employees to competitors and 67 percent concerned about the difficulty of finding skilled labor. If employers want to recruit better and retain their valuable workforce, a total compensation plan can be the first step.

Making Total Compensation Meaningful to Employees

Unfortunately, the total compensation message often goes unnoticed or underappreciated by employees who may not understand what they are reading. Benefit and compensation terms can be complex topics, and employees may not be given an organized statement that makes sense to them. To ease the general overwhelm and confusion over total compensation, here are some helpful tips for communicating this in a significant way.

  • Include all benefits, incentives, and performance pay in the statement. 
    Your total compensation can and should include a broad array of benefit and incentives for employees. Start with the basics of traditional benefits like medical, dental, vision, and life. Then work towards supplemental benefit options that are low cost, but have a big impact on employee well-being (eg. Cancer care and hospital indemnity coverage, short and long term disability insurance, etc.) Then include your unique perks, such as company wellness incentives, above average merit raises, and special discounts or programs geared towards retaining employees and supporting work life balance.
  • Use a total compensation statement builder to make it personal.
    Fortunately, there are a number of ways to present total compensation to your employee population. Using a robust product that’s linked to your payroll system, input the benefits and incentive information into the total compensation statement builder. Personalize the statement so that each employee gets a well-organized overview of his or her compensation, and review carefully with your internal team to make sure that the message is clear enough for all levels of employees.
  • Focus on employee retention first, recruitment second.
    Your total compensation strategy will get the most mileage if you come from a place of employee retention first, then recruitment as HR focus areas. Why? It should be obvious that you have invested a lot of time, money, and effort into building your workforce. This is where your greatest return on human capital investment comes from. Second to this, is the effort you put on recruiting the very best candidates to come work for you, so you can later reach company objectives. Current employees will find this more meaningful because you are dedicated to keeping them on board through your compensation and benefits program.
  • Communicate total compensation often, using multiple mediums.
    Once a year is not enough for talking about total compensation. If you want to retain your workforce and build employee morale, your management team needs to get behind it and communicate it often throughout the year. Use multiple mediums to accomplish this, such as during team meetings, performance reviews, and even social networks. Speak loudly and transparently to all the perks of working for your company, and let employees experience the full impact.

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  1. 4 Tess C. Taylor, PHR, CPC 21 Nov

    Your comments are welcomed and appreciated! 

    There is much to be said about providing employees with visually-powerful total compensation reports. Employees ARE pleasantly surprised to "see" how much their employer is actually vested in their success and well-being. 

    When used as part of a compensation strategy, total compensation statements can help retain a productive workforce and attract top performance candidates to your doors. As an HR manager, I've seen this do wonders for employee morale!

    Please feel free to share how you think total compensation statements can be used in the workplace. We want to hear from you!

  2. 3 Jalal Muslet 20 Nov

    A well prepared article that obviously depicts a profound knowledge, professionalism, insight  and practical exposure to one of the most effective HR practices as regards to attraction,retention and reward design. An above all the importance of robust methodology of communicating your compensation schemes. WELL DONE. I believe it is of  a great value to HR practitioners.  

  3. 2 Mark Kehnemund 20 Nov
    Thanks for the article. We did our first last year and will repeat this year. It is surprising to many once placed in their hands.
  4. 1 Tammy Robinson 20 Nov


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