Many organizations may be leaving value on the table by offering Total Rewards packages that don’t align with what employees truly want. By identifying and investing in high-impact benefits — and phasing out low-value ones — leaders can increase engagement, strengthen retention, and make every dollar work harder for their people and their business.
A strong Total Rewards strategy balances multiple priorities to create programs that are both competitive and meaningful. Five interconnected components form the foundation:
When these components work together, Total Rewards become a driver of both organizational performance and employee satisfaction. Without them, organizations risk making expensive decisions without up-to-date data that may be contributing to increased turnover.
When it comes to investing in Total Rewards programs that will align with what their employees value, organizations can take cues from how individuals make decisions about their personal budgets.
Most households allocate resources first to essentials such as housing, groceries, utilities, taxes, and savings before deciding how to use discretionary income. What’s left is available to spend on other things that bring you enjoyment. The same $4,000 of discretionary income might go towards someone’s family trip to California, or the latest home theatre equipment, or cover car payments on a German-made sports sedan.
People are pretty good at optimizing the return from their discretionary income by spending it carefully on the things they value most. But what if they didn’t have a choice?
If everyone had to use the $4,000 for a trip, some people would be satisfied while others, the non-travelers, would have been happier with a $1,000 big screen TV. For these people, a much less expensive item would have been more highly valued.
That’s what employers need to consider when designing their Total Rewards programs. These ‘people programs’, (including but not limited to salaries, benefits, stock grants, pensions, fitness centres, free coffee, employee training, and other employee perks) must all fit within a finite “people related” budget.
Balancing diverse employee needs within a fixed budget is challenging. Individuals having the advantage of knowing their own priorities; organizations, however, may not have that clarity. Without regular feedback, companies risk investing heavily in programs that employees don’t use or value. A Total Rewards review provides essential insights into:
Stratford’s People & Culture services use a data-driven approach to help organizations ensure every dollar supports both employee satisfaction and business objectives.
An effective review considers:
A stock option plan might be highly valued by senior leaders, while early-career employees might prefer tuition reimbursement or debt support. Without understanding these differences, even well-intentioned programs can miss the mark.
This analogy is about more than cost — it’s about fit. Misaligned benefits may not resonate with the employees they’re intended to support.
In practice, alignment could mean:
More organizations are moving toward customizable Total Rewards models. Flexible benefits portals or credits allow employees to direct their share of the budget toward the options that matter most to them — whether that’s professional development, wellness, childcare, or additional vacation time.
Three steps to start:
The cost of misaligned rewards is high — not just in wasted spend, but in lost talent. Inflation, hybrid work models, and changing employee expectations mean that programs designed years ago may no longer have the same appeal.
Organizations that realign their Total Rewards now — ensuring compliance, market competitiveness, relevance, measurable impact, and strategic alignment — will be better positioned to attract, engage, and retain top talent.
As you prepare for the next planning cycle, set aside time to review your Total Rewards portfolio. It could be one of the most valuable investments you make — for your employees and your organization.
When Total Rewards programs reflect what employees value most while meeting compliance, competitiveness, and strategic objectives, every dollar invested works harder to drive engagement, retention, and performance
Ready to ensure your Total Rewards program is competitive, valued, and strategically aligned? Book your Total Rewards Review with Stratford Group today and make every dollar work harder for your people and your business.
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A seasoned human resources executive and President of Stratford People & Culture, Mike D'Amico has extensive experience deploying HR solutions in all business environments. He provides HR assistance to companies in aggressive growth mode along with those undergoing significant business transformations, and has in-depth experience working with boards of directors and HR compensation committees. Mike is an in-demand thought leader who has spoken at numerous international HR conferences. He holds a B.A. in law and sociology, an HR management certificate and achieved the SHRP certification – the highest HR certification level in Canada. |
This blog post was originally published in 2012. It has been updated with new content.