A Total Reward System

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A whole incentive system is one that incorporates all of the methods that companies use to find, motivate, and keep employees. Michael Armstrong claims that this system is made up of the following five components: remuneration, benefits, work-life balance, performance recognition, and professional growth (Armstrong, 2010).

Compensation. This refers to other methods the employee can make money from the business in addition to his or her normal pay. Because it pays based on the employee's performance, this type of award is intended to encourage the employee to be more productive and perform better within the organization (Armstrong, 2010). This component offers both immediate and long-term incentive incentives. The short-term rewards involve the compensations for a period less than a year while the long-term requires payment for performance and productivity sustained for a time that exceeds one year.


The benefits involve the employer options and the mandatory programs. An employer is expected to offer the employees with benefits that surpass the legally mandated benefits for him or her to attract top-notch workers. The necessary programs include; Medicare, worker’s compensation, state disability insurance, and unemployment insurance. He or she is expected to provide the employees with pension programs, sick leaves, leave of absence and a vacation package.

Work-life balance

This provides that the employees are given the opportunity for them to meet their own goals and obligations. The working environment should offer a right balance between personal time and work (Fiona Jones, 2013). The work schedule should give the employees enough time to rest and this way their morale is boosted. The employer can also offer his or her workers with fitness facilities, health screening, and nutritional counseling and stress-management workshops.

Performance recognition.

This involves a system of recognizing the employees by awarding those with exemplary performances. The honor is given to the employees to let them know that the employer is aware of their excellent work in the organization. It can be through peer and team recognition where the recipients are voted for by their co-workers. They include awards like; appreciation luncheons, and employee-of-the-month.

Career development

The employer is expected to provide his employees with professional development to help the employees grow in their line of business. The progress can be achieved by providing them with technology training, mentorship programs, outside seminars and advancement tracks

Essential elements of the total reward system are similar in that they all aim at ensuring that the employer can attract top-notch employees to his organization, and retain the motivated employee. However the elements differ in the methods used to achieve the motivation in that under compensation and performance recognition, an employee can be rewarded by being offered cash rewards however in the other elements different methods are applied in rewarding the employees. In career development, for example, the employee is paid by being offered training in his/her career field. In work-life balance, the employer is expected to ensure that the working environment provides the employee with a conducive space to balance between work and personal time.

Insights gained from learning total rewards systems

The total reward strategy should be in line with the organizational strategy. The company should come up with policies that support the key priorities of the organization. These plans should also be well known to each employee (Watson, 2012).

The rewards you design, communicate, implement and should help drive at the specific employee behavior that the business would like to achieve (Watson, 2012). Different companies have different programs that would help shape the employee's behaviors. Each company ought to identify its right mix.

Enhance your spending by allocating it among programs that seem to be of importance to the employees, and programs that will bring more returns to the organization as compared to the cost and risk (Watson, 2012). The company should allocate its resources to projects that motivate the employees as this will help increase the returns in the long-run.

Assessing effectiveness of total rewards system in a real estate brokerage

The real estate company has 15,000 employees across the 200 branches across the country. Its’ employee reward strategies are centered on five principles which are; bonus for market-leading performance, market competitive salaries, performance reward that is fair to all employees, performance-driven rewards and competitive benefits. These five principles are used to ensure the rewards are more precise and at the same time provide they are motivated and flexible.

Bonus for market-leading performance

The company provides the employees who show exemplary performance in their marketing strategies. Those employees who can attract many real estate customers are rewarded with bonuses in the form of cash. The company also ensures that the bonus compensation is better than that offered by its competitors.

Market competitive salaries.

The company offers salaries that are higher as compared to its competitors and this acts as a motivation to the employees in that the company can attract and retain top-notch-employees.

Performance reward fair to all its employees.

The reward system is appropriate in that it is based on the performance of the individual persons or groups. The equality and fairness are upheld to ensure that no employee feels left out of the system, and everyone has equal opportunities to perform and get rewarded. Both the men and the women in the company are offered with same average pay and also same promotion rates across all the branches.

Performance driven rewards.

There are salary increases and bonuses for the exceptional performers as compared to the rest strong performers. The employees are rated by using grades, and one receives better rewards based on the category you are ranked. Employees who improve their ratings are also recognized by being given awards as they move from one category to the other, and this works as a motivating factor for these employees.

Competitive benefits.

The firm offers the employees with a wide range of interests which include vacation packages for the individuals who can market the most properties by the end of each financial year. The firm also provides its employees with a pension scheme and medical coverage among other benefits.

For the company to continue having a smooth reward system, it can apply the three insights. The first idea which involves ensuring that the total reward system strategy is in line with the organizational strategy. When the corporate plan is outlined, the employees will be able to identify what is expected from each one of them and they will strive to ensure that they achieve the set goals for there is a reward after completing the objectives (Mahr, 2010). This will ensure a smooth running of activities in the company and avoid a lot of conflicts among the management and the employees which is an excellent factor in employee retention.

The second insight which is coming up with rewards that drive at specific behavior the company wants to achieve. The company should help ensure that the employees have the right skills and knowledge required. This can be achieved through providing proper training to the employees so that they can improve their expertise in the field. This way the company will benefit from being able to attract and retain loyal customers based on the employee competency and also it will be able to maintain the motivated employees (Eleazu, 2016).

The company can also allocate more resources to the reward system especially the programs that matter most to its employees. It could increase the number of vacation slots to three individuals compared to the current two slots, and this could act as a motivating factor to other employees.

Action plan

To ensure that the reward system works efficiently, the following strategies can be applied efficiently by organizations (community toolbox, 2017).

1. Communicate the insights to the employees. Ensure that the employees are aware of what is expected from them by the organization and point out to them the mission and goals of the organization.

2. Outline the rewards to the employees and also state the standards to be achieved to be able to get the reward. The rules should be set in a way that they drive to a desirable behavior the company wants to meet. The company should also identify how the fixed strategies can be obtained.

3. The company should lastly allocate its resources to the reward system by rewarding each employee who can meet the standards set by the company. The rewarding system should also be fair and equitable.

4. Evaluate the action plan to ensure that it provides the desired results.


Armstrong, M. (2010). Armstrong handbook of reward management practice improving performance through reward. Kogan Page Publishers.

Community Toolbox. (2017). Developing strategic and action plans. The University of Kansas.

Eleazu, O. (2016). The cult of service excellence; how to build a truly customer-centric culture. LID Editorials.

Fiona Jones, R. J. (2013). Work-life balance; A psychological perspective. Psychological press.

Mahr, F. (2010). Aligning Information technology, organization, and strategy. Spring science and business media.

Watson, W. (2012). Total rewards; the right time is now. The United States.

February 22, 2023

Business Psychology

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