Gearing towards total rewards

March 08, 2018 | Thought Pieces


By Joseph Sanchez

Rewarding people solely with pay is a thing of the past.  There is an acknowledgement nowadays that in addition to financial compensation, providing things like skill development and meaningful work can spur employees to greater performance. With this in mind, a holistic framework called Total Rewards System was developed to address the totality of needs of the individual.

Total Rewards System, as the name implies, is simply the entirety of the rewards given to employees. And for this system to address the crucial needs of the individual, it needs to have a wide range of both financial and non-financial rewards. For financial rewards, there are four types. There is base pay which is the compensation given for the work performed. There is indirect financial compensation, which can include things like government mandated pay and protection programs. There is merit pay, which refers to the incremental increase to the base pay based on performance. And finally, there is incentive pay, which is given only upon the achievement of a predetermined standard or objective.      

Non-financial rewards are more nebulous but just as important. Given the premium given by Filipinos to friendship and social interaction, some companies see to it that their workplace has programs that promote interaction among employees. Employees also value the relationship they have with their supervisor; in relation to this, employees also expect fair treatment as well as getting a sense of the organization being concerned with their development and growth. To address this, a number of organizations develop the competencies of their supervisors to be good mentors as well as to connect with their team members.   

Employees also value having a sense of achievement in the workplace. To foster this, progressive organizations have redesigned jobs that: 1) enable the use of multiple skills, 2) have integrated tasks in one job that produces tangible outcomes, 3) have visible impact, 4) enables decision-making, and 5) provides employees with actionable feedback.  

Employees cherish being acknowledged for the job that they do. With this in mind, companies have formal recognition programs so that their people get the sense that they are appreciated for the work they put in.

Taking all of these into account, organizations can have a comprehensive rewards package that addresses multifarious objectives concerning employees. If the goal is to attract and retain talents, the corresponding action is to establish the correct base pay and have the appropriate, incentive, and benefits programs. If the goal is to drive performance, shape behavior, and recognize effort, the corresponding action is to establish incentive and recognition programs. And finally, if the goal is to improve quality of life and help meet needs, the corresponding action is to establish the appropriate benefits and work-life programs.

Ultimately a Total Reward System goes beyond fulfilling financial obligations to employees and becomes a management tool to achieve organizational goals.       

About the Author

Joseph Sanchez is an independent consultant who has provided HR and OD services to organizations for more than a decade. He has experience in Job Analysis and Competency Modeling, Organization Development, Training and Development, and Organizational Research. He completed his M.A. in Industrial/Organizational Psychology from Ateneo de Manila University.

About Ateneo CORD

Ateneo CORD is the training and research arm of the Ateneo Psychology Department that partners with people and organizations to improve their effectiveness. To know more about our services and training offerings, visit their website or follow them on Facebook


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