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Last updated: 11 May 2009
The total reward approach draws together all the financial and non-financial investment an employer makes in its workforce. It emphasises all aspects of reward as an integrated and coherent whole, from pay and benefits through flexible working to learning and development and the quality and challenge of the work itself.
Total Rewards can help public sector organisations to recruit, retain and win the engagement of high quality staff, align their investment with employee expectations and needs and secure better value for money. This approach can also help drive service improvements and ensure they meet customer needs - it has been shown that a motivated and engaged workforce delivers demonstrably higher standards of customer service.
A properly developed Total Rewards strategy will respond to employee preferences and values to create an environment that brings out the best in the workforce - a financial and non-financial reward package which will make existing employees want to stay with the organisation and attract potential employees to join it.
Different segments of the workforce, and individuals at different stages in their career, will be motivated by a different combination of rewards. A well designed rewards package will be tailored to meet these different needs.
It has been shown that a robust Total Rewards approach can increase levels of motivation and engagement in the workforce. In turn, this workforce can be expected to deliver demonstrably higher standards of customer service.
There is robust evidence that pay - while often the primary focus of HR departments - is not the ultimate motivator of staff. Although it is often argued that the public sector offers better work-life benefit policies than other sectors, we often fail to make the most of other aspects of the reward package, e.g. pensions, training and development, flexible working, to drive up motivation and improve recruitment and retention. While the case for Total Rewards is accepted, organisations can struggle to know where to start.
The Total Rewards approach will help HR departments to get started and to take practical steps to develop a strategy, including through the Engaged Performance diagnostic tool which can be used to survey employee attitudes to the existing reward package.
The toolkit is designed to give public service HR professionals the tools and information they need to deploy a Total Rewards approach, raising staff motivation and benefiting recruitment and retention, which in turn can support service improvements.
In 2003, Cabinet Office and HM Treasury conducted a joint Stock take on public sector pay and rewards. This found that, while a wide range of reward options was available to public sector employers, it was not clear that these were being used to the optimum extent and to greatest effect to help recruit, motivate and retain staff. Where they were used, there was little monitoring or evaluation, or sharing of good practice between employers.
To raise awareness of the Total Rewards approach, and to encourage good practice across the public sector, Cabinet Office agreed to lead on development of the policy and toolkit, sponsored by the Public Services Employers' Forum and in collaboration with representatives from across key sectors.
A number of public service employer websites are linked to the toolkit.
Cabinet Office is working with its project partners to develop a dissemination strategy that will raise awareness of the Total Rewards approach, and the practical assistance available through the toolkit, among the widest possible audience of public sector HR professionals.
As well as monitoring awareness of the approach, and usage of the toolkit, among public service employers, and assessing the extent to which Total Rewards is integrated into sectoral and local pay and workforce strategies, we plan to evaluate the effectiveness of the approach in specific organisations that draw on the toolkit to develop Total Rewards strategies, examining factors including its impact on employee satisfaction, recruitment and retention.
There is no requirement to apply the toolkit to develop a Total Rewards strategy. But Government is clear that a Total Rewards approach will secure benefits for organisations, the workforce and customers, as part of an effective pay and workforce strategy. We strongly encourage organisations to use the toolkit to develop or improve their Total Rewards strategy.
The toolkit has been designed specifically for use in public sector organisations. However, the philosophy behind the Total Rewards approach applies equally to the private sector, so the website may provide information helpful to private sector organisations looking to develop a Total Rewards strategy.