Design employee reward programmes that inspire and retain

Employee reward and recognition programmes incentivise employees as they support your business goals. But ‘rewards’ means different things to different people and having a counterbalancing organisational perspective is equally important. So, it’s crucial to design your employee reward programme specifically for your workforce.

Standard employee reward programmes might contribute to burnout

People need to feel appreciated, so your workforce appreciation efforts count – both to motivate and to avoid burnout.

To support your people’s mental and physical well-being and incentivise performance, having the right employee reward and recognition programmes are essential. But in this era of individualised choice, ‘rewards’ means different things to different people at different life junctures.

The ‘wrong’ employee reward programmes – the ones that don’t meet individual needs – are part of the reason employees are burning out. To prevent it, organisations now need to go beyond the traditional contractual rewards of pay and broad-brush benefits plus ad hoc components.

How do you know what rewards your employees need?

Begin by asking them without preconceived ideas.

To personalise workforce rewards, companies have begun using ‘personas’ to identify what matters most to target populations and to operationalise their employee rewards programme for distinct groups. 

Innovative rewards programmes effectively address individual’s preferences – enabling them to feel healthy, supported, and energised, personally as well as professionally – while staying within organisational and cost realities. A balance can be achieved with the right reward and recognition strategy.

Effective workforce rewards design requires:

  • Embracing the differentiated needs of a diverse, multigenerational workforce, and defining the appropriate engagement mechanisms for each group,
  • Understanding individual employee experiences and categorising those experiences into personas,
  • Holistically addressing employee needs with a more nuanced and flexible approach,
  • Considering all perspectives: personas, organisational needs, industry standards, regulatory landscape, competitor offerings, cost, and societal values, and
  • Formulating a rewards programme that harmonises with your other employee value propositions (EVP) and total rewards offerings.
Total rewards

Total Remuneration Survey

The world's largest and most comprehensive remuneration resource.

Employee reward programmes as talent retention tools

Having an outstanding reward and recognition programme as a talent attraction tool is important in a competitive, employee-centric labour market. But once employees are on board, designing for employee engagement and retention becomes the real challenge. 

To stay with an organisation, employees want rewards that enhance their professional, and increasingly – personal – experiences. 

Exceptional employers are developing employer-curated career paths and guidance and the more transparent and flexible these options, the better. Employers are becoming much more involved in employees’ non-work lives, too. Thriving organisations are embracing a holistic notion of well-being, providing programmes to bolster people’s physical, financial, emotional, and social health.

Finally, employers must offer rewards that connect with employees through a sense of common purpose. Motivated employees see their work as contributing to a larger purpose, not just as a job. Employers can nurture a truly unique connection with the organisation by: 

Four essential inclusions in employee reward programmes

To make reward meaningful for both you and your employees, your programme should be:

  • 1. Informed by the market

    Are you paying too much — or too little — for jobs and skills, including those that are emerging? Are competitors offering incentives or programmes you don’t have, but need? These are questions organisations across the world are grappling with. Our compensation benchmark database uses the most accurate and up-to-date market data practices for evaluating and establishing competitive compensation. With Mercer’s job evaluation tools you’ll have access to relevant market data that helps you calibrate pay levels across countries and industries.

  • 2. Performance-driven

    Mercer are thought leaders in performance management practices and trends as well as incentive plan design. We help you ask the right questions and determine the right employee rewards solutions. How effectively are you rewarding performance? Are you using the right employee reward platform? Do your incentive plans drive the right behaviours? Is your company’s performance management achieving the desired results? Can your company identify top performers?

  • 3. Delivered fairly and consistently

    Mercer’s global review process, supported by our Pay Equity Calculator helps you review pay equity across your global workforce. Our proprietary job evaluation methodology gives you an objective measure of job value, while our approach to career frameworks helps you establish job families and universal career levels that align with your pay programmes to deliver pay equitably and consistently.

  • 4. Designed to support individual career development

    Internal agility, upskilling and reskilling are essential to thriving in our evolving world, and it’s vital for companies to create a culture of skills and career development. Central to enabling that culture is how you design jobs within a career framework, reward horizontal and vertical talent movement, and reflect skills and proficiency in your pay guidelines.

Mercer’s employee rewards services and solutions

Our consultants partner with you to develop competitive workforce reward and recognition frameworks to help you attract and retain the best talent in the market. We can help you improve performance and boost your competitive advantage.
  • Salary and benefit benchmarking surveys

    Whether you’re developing a new competitive pay structure or aligning productivity and performance for your people, access to a robust set of data and benchmarks both at market level and at specific job levels is critical to attract and retain the best talent for your business.
  • Workforce reward and compensation

    We partner with clients to develop robust workforce rewards and compensation structures with your business objectives in mind. We ask challenging questions, analyse data in rich, targeted ways to ultimately help you in crafting breakthrough solutions.

To solve your most pressing employee reward challenges, we also offer Packaged Workforce Reward consulting solutions.

Irrespective of organisational size and structure, the most common employee reward issues often hinder organisational agility. In response, we have developed a range of solutions that can be used to bring structure and drive consistent decision-making when addressing the most common workforce reward hurdles.

Our Packaged Workforce Reward consulting solutions are built on Mercer’s HR consulting heritage, delivering best practice design combined with practical tools. Our solutions establish the foundations for more effective HR and employee reward management in the areas of highest focus, including: 

  • Grading and pay management 
  • Sales compensation 
  • Company cars
  • Gender pay reporting and equal pay.

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