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A total rewards statement (or total compensation statement) is a document that outlines an employee’s total compensation package. It provides a comprehensive overview of the employee’s base pay, bonuses, equity, and other benefits.
Total rewards statements are typically provided annually, semi-annually, or quarterly as a result of promo and merit cycles.
They offer employees a detailed breakdown of their compensation and benefits.
There are 4 main benefits of total rewards statements, we’re going to focus on here—both for employees and employers.
Here are a few of the most important benefits:
- Employees better understand their total rewards package.
When employees have a clear understanding of their compensation and benefits package, they are more likely to feel valued and engaged in their work.
By highlighting the full value of their compensation package, total rewards statements improve the retention rates of current employees.
Employees who feel they are being compensated fairly are less likely to leave their job for better opportunities.
- Employees better understand performance and expectations.
Total rewards statements give employees clarity on what’s expected of them, and what outcomes match what performance.
In other words, it’s clear what an employee should be doing to meet and exceed requirements, giving them a clearer path to success.
- Clarity around the company’s pay philosophy and pay practices.
Total rewards statements can help to provide transparency into an organization’s compensation and benefits program.
This can help to build trust and credibility with employees, which can be invaluable in retaining top talent.
Plus, you see what matters to the company. Are they focused on retention of employees? Do they believe in pay equity? Are they transparent with salaries?
Total rewards statements answer all these questions with firsthand proof.
- Opportunity to recognize employees
Total rewards statements are the perfect opportunity to recognize an employee’s hard work.
They serve as a tangible, visual representation of how much you appreciate and value an employee’s work.
While H.R. is accustomed to handling promotions and merit changes regularly, this is a career moment for an individual.
Highlight them by making your total rewards statement a genuine celebration of their work.
We know it’s important to make the most of a total rewards statement because it matters to employees.
Here are a few ways you can be sure you’re delivering the best total rewards letter possible.
Consider the following elements in your rewards letter:
Clear and Concise Language: Use clear and concise language to explain the compensation and benefits package. Avoid technical jargon and explain any terms that may be unfamiliar to employees.
Detailed Breakdown of Compensation: Provide a detailed breakdown of the employee’s compensation, including current salary, new salary, salary increase amount, equity, bonuses, and any other rewards.
Personalized Information: Personalize the statement by including the employee’s name and
other relevant information.
Total Rewards Statement Example:
(You can easily create this in Pequity.)
Total rewards statements are a valuable tool for organizations to provide a clear understanding of an employee’s compensation and benefits package.
That’s why we’ve got the perfect, customizable template in Pequity already built for you.
By highlighting the full value of employment, organizations can improve engagement, build trust, and retain top talent.
Total Rewards Statement Software: With Pequity’s in-app rewards letters you can automate the distribution of your total rewards statements during your compensation cycle (promo and merit cycle).
Request a brief demo of Pequity today.