No Image Available

Charlie Duff

Sift Media

Editor, HRzone.co.uk

Read more about Charlie Duff

Total reward: the holistic approach

pp_default1

Recent research highlighted that 80% of public sector workers have never heard of total reward packages, despite recognition that a holistic approach to health and wellbeing significantly improves staff retention and increases productivity.

Public Sector organisations are increasingly expanding their rewards package to their employees, over and above their basic salaries. Do those benefiting from these packages understand the opportunities they provide? This is an important question that the research, commissioned by Benenden Healthcare Society, attempted to answer.

The research investigated staff awareness of health and well-being schemes in relation to ‘total reward,’ a scheme that combines financial remuneration and non-financial rewards into one benefits package. It gives employees the opportunity to earn qualifications and gain new skills enhancing their future career prospects, engages the employee more directly with the business, and also addresses issues surrounding health and wellbeing in the workplace.

1,010 public sector workers were surveyed on their understanding of Total Reward and what this scheme means to their organisations. The survey indicated that an overwhelming%age (80%) of public sector workers have never heard of ‘total reward’.

An interesting finding revealed that, of all the workers surveyed, 57% thought that total reward (in regards to well being, retention or absence management) had a positive impact on employee motivation. In particular, 79% of senior managers identified motivation as the key quality impacted by the total reward scheme. With latest figures showing the public sector loses 9.7 days per employee every year, and the private sector 6.4 days ; it is clear that employee absenteeism is a major issue affecting UK businesses, a problem that could be improved by the introduction and better communication of such schemes.

 The research also showed that communication of schemes implemented in the workplace is often poor. The majority of communication is done via email bulletins, and almost a quarter of workers surveyed (24%) claimed that benefits packages were not communicated to staff at all. Furthermore it appears that 12% of board members, 14% of senior management, 17% of middle management and a huge 30% of junior management, were not communicated to about Total Reward or other such schemes.

It is vital to interact and engage with staff face-face to ensure they are fully aware of what is being offered to them.

Organisations need to think strategically and practically about how to keep people well and operational within the workplace. The responsibility for this lies not only with HR managers but critically must be adopted holistically throughout the organisation, from the top down. Only with this approach will they be able to get the best out of their most costly investment – their staff.

When researching the management of absenteeism and stress levels in the workplace Benenden Healthcare found that the cost of sickness absence to an organisation is known only to managers at the highest (board) level. According to the survey 29% of board members claimed to know how much sickness absence costs the organisation, compared with meagre 6% of senior managers, 3% of middle managers and 1% of junior managers.

Health and wellbeing must be seen at board level, as a strategic core aspect of any employee health plan. There needs to be recognition that every management policy addressing staff health, well-being and sickness is linked directly to the impact it will have on a business’s bottom line and how much return on investment the employer will receive. It may sound straightforward, but it must come down to how input, in terms of time and money spent, matches output achieved in terms of results and profit made.

Su Wang, former Group Head of Health at the Royal Mail Group, also worked with Benenden Healthcare to provide Royal Mail employees with incentive packages to improve their health and well being. Su felt it was necessary to include additional packages to their occupational health offering, developing a ‘health and well-being’ strategy which incorporated a wider range of services.

Su Wang invited the Society to attend their annual men and women’s ‘Health Week’ as an opportunity to promote their services and explain the benefits of having a broader health package. The popular ‘health and well-being’ packages contributed significantly to an improvement in motivation and attendance in the workplace.

Su says “As a result of improving the health offering to employees the Royal Mail Group saw improved employee wellbeing, motivation and attendance by 25% saving the organisation over £200 million”. These figures highlight just how valuable the savings associated with this kind of reduction can be, and was published in ‘The value of rude health’ report by the London School of Economics.

The report by the LSE stated the Royal Mail Group ‘successfully reduced absence from 7% to 5% between the years of 2004 and 2007 – which is equivalent to getting an extra 3,600 full time employees back into work and saving the Royal Mail Group more than £227 million over three years’ .

Amanda Ludlow, head of business development at Benenden Healthcare Society explained, “Health and wellbeing needs to be directly linked to organisational productivity as only by doing this can money lost through absenteeism be saved – particularly paramount when the UK is recovering from one of its worst recessions in history.”

“Staff absenteeism will only serve to hinder business recovery, at a time where we all have to dig deep and prove our worth. Moving away from a ‘parental’ style of absence management, and motivating staff to stay happy, healthy and in control of their overall wellbeing has proven to benefit organisations’ bottom line performance. Putting in place an effective health and wellbeing strategy, then empowering staff with the solutions, is the recipe for a happier, healthier and, in turn, more efficient workforce.

It is clear that public sector organisations can draw greater benefit from a more holistic approach using total reward schemes, more engagement and a greater emphasis on health and well being initiative or programmes amongst employees. Healthcare is very important to a workforce, to quote Lord King: “Organisational effectiveness relies on staff being happy, healthy and here!”

Total Reward Research: Key Findings

  • No clear understanding of ‘total reward’
  • There is a broad belief that Total Reward policies will have a positive effect on motivation
  • Limited understanding of the cost of non-salary benefits
  • There’s a lack of knowledge on the true cost of sickness absence to an organisation
  • Sickness absence is not seen as an institutional or cultural issue – it is an individual issue
  • Health and well being not a high priority at Board level

For further information on Benenden Healthcare’s Total Reward research visit: www.benenden.org.uk/totalreward
 

One Response

  1. Motivating people to stay happy is a myth

    I am intrigued by many of the claims for motivating people and I have yet to see any real data (or evidence) to show that such extrinsic methods actually achieve this in a way that is good for the business/organisation.

    I refer to the work of John Seddon in particular and the systems approach, which is strongly supported by experiments reported in works such as Alfie Kohn’s Punished by Rewards or Mintzberg on motivation (positive and negative Kita). 

    Systems Thinkers argue that when you design a system that is truly configured to demand, upon systems principles that aid flow, then satisfaction is the consequence of the well-designed system. The motivation becomes intrinsic, I want to do this because it is the right thing to do and I am helping people, as opposed to I am doing this because I am focusing upon that big and juicy bonus or those vouchers. 

    With extrinsic motivation, the focus becomes the thing being used to motivate (a target, a bonus, a sticker). It is one of the reasons that bankers worked the economy into the dust. The focus became make money at all costs to achieve the bonus and forget the consequences to the system. 

    Masses of video and articles about this stuff at The Systems Thinking Review  – http://www.thesystemsthinkingreview.co.uk/

     

     

No Image Available
Charlie Duff

Editor, HRzone.co.uk

Read more from Charlie Duff
Newsletter

Get the latest from HRZone.

Subscribe to expert insights on how to create a better workplace for both your business and its people.

 
 
 
 

Thank you.