How?

Implementation of the total rewards strategy should start by establishing the objectives, what do you want to achieve (e.g. high productivity, innovation, teamwork, loyalty, controlling labour costs), and by estimating the total budget. The next step should be defining the elements of total rewards, what will be the in mix (e.g. base salary, pay for performance, benefits, non-cash rewards and recognition).

For any type of pay for performance it is important that incentives are linked to your business strategy. Make sure that effort and/or desired behaviour is directly related to rewards. The programme should be based on clear criteria and objective performance evaluation. It is important that it is well communicated to employees, that it is simple and easy for employees to understand, and that it does not create additional paperwork to administer it. Remember that all types of pay for performance have their advantages and disadvantages and therefore it is the best to use a combination of different programmes.  

Among benefits there are some that are mandated by law (e.g. in many countries these are health and pension insurance) and others given at the discretion of an employer (e.g. health promotion, work-life balance). 

Non-cash rewards can be either formal or informal and they come in many different forms, depending on your creativity. On the other hand, recognition is an on-going activity through which people express their appreciation for each other’s value and contributions (e.g. praise, acknowledgment, seeking input, sharing Information). In the past, rewards and recognition were mostly top down from a boss to an employee, but nowadays there is more of horizontal, peer-to-peer approaches, often involving the use of social media. Key to effective rewards and recognition is the perception of a receiver, that is why customization is very important. To make it even more attractive for young talents, you can use gamification. 

Once you define the elements of a total rewards package, you will need to decide who is eligible for each element, first based on their job position and then based on their individual preferences. Your system will be most effective when you give employees some choice what they want to include in their package. For this you need to calculate or estimate the value of non-cash benefits and rewards (e.g. what is the value of an additional vacation day, what is the value of training) to ensure equitable treatment of all employees. 

When attracting talents, it is important that total rewards package is included in a realistic job preview, so that you will be able to keep promises. When you make a job offer it is time to discuss and negotiate individualized pay package.  

In order to successfully implement the total rewards system, you need to communicate extensively, train people how to make decisions and ensure transparency. Continuous evaluation of the system and analysis of its effect will help in finding ways to improve it over time. Remember, there is no perfect system, but there are always ways to make the existing one better.