WorldatWorkTotal RewardsModel

T O T A sationHR STRATEGYPRODUCTIVESocial NormsRegulatoryAI & TechnologyProduct MarketLabor ERIENCESINSPIREDINFLUENCESE W A R D S ST RM O D E LGYTAL RTOR E W A R D SORGANIZATIONPERFORMANCERecognitionCOMMITTEDTotal Rewards encompasses the elements– compensation, well-being, benefits, recognitionand development — that, in concert, lead to optimalorganizational performance. When designed strategically and executedin alignment with business goals, Total Rewards programs fuel motivatedand productive workforces that feel appreciated and rewarded for theircontributions, driving the organization to ever greater success.Initially introduced in 2000, the WorldatWork Total Rewards Modelcontinually evolves to reflect changes in organizations’ needs, workforceexpectations, workforce demographics and the Total Rewards profession.The practice of Total Rewards requires in-depth knowledge, specializedskills, and up-to-the-minute insight into the most critical issues facingtoday’s workforce. The model captures the broad influence that TotalRewards practices and its practitioners have on organizational strategyand workforce outcomes.worldatwork.org2

T O T A LR E W A R D SM O D E LThe Total Rewards ModelThe Total Rewards Model encompasses five components, each of which includesprograms, practices, and nuanced dimensions that collectively define anorganization’s strategy to build a productive, inspired and committed tRecognitionCompensationPay provided by anemployer to workers inexchange for services suchas time, effort and talent.This includes both fixedand variable pay tied tooverall contributions.Well-BeingThe state of a workforcethat is productive,comfortable, happy, andhealthy, consideringphysical, emotional/mental, financial andenvironmental factors.Total Rewards professionalsinfluence this state throughorganizational strategicinfluence and buildingprograms that supportworkforce success insideand outside of work.BenefitsDevelopmentRecognitionPrograms focused onhealth and welfare, incomeprotection, financialpreparedness, retirementand time off includingleaves of absence,aimed to provide holisticwell-being and securityfor the workforce andtheir families.Encompasses the rewardsand opportunities thatemployers offer theirworkers to advance theirskills, competencies,responsibilities andcontributions — inboth their short- andlong-term careers.Formal or informalprograms that thank,validate, recognize andcelebrate workforcecontributions whilealigning and strengtheningorganizational culture.worldatwork.org3

T O T A LR E W A R D SM O D E LInfluencesFollowing are the many external and internal influences that inform Total Rewards initiatives.Internal InfluencesThere are also internal influences that inform the design and implementation of Total Rewardsprograms. These encompass business strategy, culture, workforce, inclusion, and shipINFLUENCESHR STRATEGYSocial NormsRegulatoryAI & TechnologyProduct MarketLabor MarketStrategyCultureThe WorkforceInclusionLeadershipTotal Rewards strategiesare a mechanism to makea strong business strategycome to life. Whetherthe goal is operationalexcellence, product/service leadership, orcustomer engagement –rewards programs helpcommunicate expectations,align efforts, and motivatethe behaviors required todeliver results.Simply stated,organizational culturerefers to a set of sharedvalues and beliefsthat form over time aspeople interact and worktogether. It encompassesan organization’s vision,values, norms, andultimately influencesworkforce experiencesand outcomes. TotalRewards offerings can helptransform and re-enforcedesired cultural norms,and significantly influencehow work is performedand recognized inthe organization.Rewards must be tailoredto meet the needs ofan increasingly diversepool of employees that isdefined by geopoliticaltrends, tech advancesand talent demographics,including today’s up-tofive-generation workforce.Savvy Total Rewards prossee this as an opportunityto attract the highestperformers and “best”the competition.In these hyper-acceleratedtimes, diversity andinclusion strategiesprovide organizationswith a competitiveadvantage in talentattraction and workforceproductivity. Total Rewardsprofessionals leaderscan help organizationsachieve greater diversitywhile building an inclusiveculture by developing clearapproaches for pay equityand transparency, careerdevelopment, inclusivebenefits and more.Total Rewards programsare only effective whenleaders play an active roleto promote understandingand appreciation of therewards programs. TotalRewards practitioners mustwork with organizationalleaders to ensure thatTotal Rewards initiativesalign with businessgoals and that they arewell-understood, used andappreciated by workers formaximum impact.worldatwork.org4

T O T A LR E W A R D SM O D E LExternal InfluencesAn organization’s Total Rewards program must be created in consideration ofexternal influences including social/cultural norms, the regulatory environment,advancements in AI and technology, and the competitive (product and labor)markets. A deep understanding of these factors provides the context required tobuild effective programs that attract and retain high-performing employees anddrive business ipINFLUENCESHR STRATEGYSocial NormsRegulatoryAI & TechnologyProduct MarketLabor Marketworldatwork.org5

T O T A LR E W A R D SM O D E LHR StrategyThe Power of Total RewardsWhile Total Rewards plays a leading role in theemployee experience, it does not exist in a vacuum.Initiatives must be completely woven into theenterprise’s HR strategy, considering the humancapital and societal influences that affect programdesign and strategy. Upskilling, the gig economy,regulatory changes, AI’s impact, data analytics, payequity, and other HR factors all influence the TotalRewards Strategy.When business strategy, culture and Total Rewardsprograms are aligned, the result is productive,committed, and inspired employees who contributetheir time, talent and efforts at their highest levels.In turn, this elevates performance of individuals andteams, and enhances the bottom line. The gap betweenwhat happens and what is possible is best impactedby thoughtfully designed Total Rewards programs.It is the most direct path to achieving organizationaloutcomes and ultimately delivering the highest valueto your hipCompensationHR STRATEGYPRODUCTIVESocial NormsRegulatoryAI & TechnologyProduct MarketLabor ORKFORCEEXPERIENCESINSPIREDINFLUENCESE W A R D S ST RGYTAL 6

TOTAL WARDS MODEL The Total Rewards Model The Total Rewards Model encompasses five components, each of which includes programs, practices, and nuanced dimensions that collectively define an organization's strategy to build a productive, inspired and committed workforce. Recognition Formal or informal programs that thank, validate, recognize and