Most employees have a very good grasp on their direct compensation. Direct pay however, is only a small portion of what employees receive from an organization. Typically organizations pay significant amounts of money for additional benefits like 401k, health insurance, etc. Communicating total rewards paid to employees through Total Rewards Statements is extremely important as it can help employees understand the full value of their compensation.
But what’s included in Total Rewards Statements and what’s not? Earlier compensation statements, mostly sent out by large companies, communicated only one part of employees’ total compensation – the benefit offerings. While these statements communicated the notion of shared responsibility effectively by identifying both employee’s and employer’s contributions, it left out the inclusion of other items that are typically included in benefits enrollment. For Total Reward Statements to be an effective tool of communication, it is important to include all programs that make up the total value of their compensation.
Here is what should be included in Total Rewards Statements:
Compensation Information
This includes base salary, overtime, bonuses, incentives, and commissions.
Time Off
Communicate the total number of days of holiday, personal leave, vacation, sick leave, maternity/paternity leave, and jury leave.
Insurance Benefits – Employee and Employer Contributions
Communicate both the employee and employer cost for:
- Medical insurance
- Dental insurance
- Vision insurance
- Flexible spending
- Healthcare spending
- Life insurance
- Dependent life insurance
- Short term and long term disability
- Business travel accident
Financial Security – Employee and Employer Contributions
Communicate both the employee and employer cost for:
- Social security
- Medicare
- Federal and state unemployment
- 401(k) plan
- Employee stock ownership plan
- Workers’ compensation
Additional Benefits
All additional benefits like child care, education/tuition reimbursement, adoption assistance, auto allowance, employee assistance plans, employee meals, paid parking, and uniform expense could be included as well.
Please contact us for more information on Harvest HCM and our suite of talent management products.