What does "total rewards" refer to in a compensation context?

"Total rewards" in a compensation context refers to an integrated approach to compensation and benefits. This concept encompasses not just the monetary aspects of employee compensation, such as salary and bonuses, but also extends to non-monetary benefits like healthcare, retirement plans, work-life balance, and employee recognition programs.

By adopting a holistic view of total rewards, organizations aim to create a more engaging and satisfying work environment, recognizing that employees value a variety of factors beyond just financial incentives. This framework considers how different rewards interconnect to enhance overall employee satisfaction and retention.

In contrast, simply considering financial benefits or just turning attention to salary and health benefits overlooks the broader scope of what employees may consider important. Furthermore, calculating employee satisfaction is more focused on gauging employee morale and sentiment rather than addressing the comprehensive strategy of total rewards.