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Short case studies and research papers that demonstrate best practice in rewards
The ideas behind total reward go back to at least the eighteenth century. In 1776 the great Scottish economist Adam Smith wrote that employees should maximize their "total net advantage" of work, thinking not just in terms of wages but also of such factors as its "agreeableness," job security and the possibility of success or failure. More modern writers, such as the UK's Michael Armstrong, have also emphasized that total reward comprises both the extrinsic (e. g. pay) and intrinsic (e.g. job satisfaction) elements in reward. US consultants Schuster and Zingheim have gone further in talking about total reward as a "philosophy, a set of principles, a mindset" rather than a set of particular reward practices. Nonetheless, the core point should be that total reward encompasses the psychological contract between the employer and employee. It should recognize the mutuality of offer, acceptance and performance of that contract, going beyond the formal terms to the unspoken assumptions of what both parties expect from the deal.
However, total reward in more recent times has been taken overas an employer-driven, one-sided rather than mutual concept. There is an understanding by organizations that there is a breadth of reasons why employees join and why they stay, and what motivates them while they are at work varies. But employers have focused their efforts on branding - how can we package our offer to attract the recruits we want; on communication - how can we get employees to realize the full value of their reward package; and on segmentation - how can we tailor rewards to fit different constituencies? Thus we have seen as outputs of this effort recruitment literature, total reward statements and flexible benefits offerings. Too often, though, these initiatives have been driven by employer perceptions of what turns employees on, without seeking employee input. And this has happened in the context of tight labour markets where attraction and retention have been seen to be vital in the "war for talent."
Listening to employees
To redress the balance, Capital Ambition (the UK local government's Regional Improvement and Efficiency Partnership for London) invited the Institute for Employee Studies to develop a methodology to help individual boroughs create an...