Senior Client Partner
Employee Experience
How a Total Rewards Strategy Can Shape Company Culture
Learn five ways an employee rewards program can lead to organizational culture transformation.
Changing the Culture of a Workplace Through Rewards
Your employee rewards program already does a lot of heavy lifting, helping attract new employees, motivate existing ones, and reduce turnover.
But it can do even more. A well-designed total rewards program can help shape your company’s corporate culture, boost employee engagement, and improve the overall work environment.
What Value Does a Total Rewards Program Bring to the Company?
Organizations are increasingly making the link between rewards and culture, using their selection of reward offerings to help reinforce their preferred cultural attributes, according to the latest Korn Ferry Global Pulse Survey of nearly 4,000 HR professionals.
“Different companies have different priorities—they might value teamwork, innovation, customer centricity, or operational excellence,” says Tom McMullen, Senior Client Partner at Korn Ferry. Respondents to the Global Pulse Survey said they’re using rewards to encourage a culture that’s performance-driven (87%), fair and inclusive (64%), collaborative (51%), and efficient (50%).
Culture transformation means behavior and mindset change at scale, throughout the whole workforce, and that’s no easy feat. Rewards can help move the needle, says McMullen. “If you’re looking to get everyone swimming in the same direction, an employee rewards and recognition program can be a really important tool for organizational culture change,” he says.
How exactly does it work? Here are five ways total rewards can reinforce culture transformation.
1 Benefit Programs Can Set the Tone
Pull quote: “The range of benefits you offer to employees sends a loud signal about what you value,” says McMullen. As such, you can boost the workplace culture that your company values by providing a suite of benefits that aligns with that ethos.
For example, the following benefits promote different company cultures:
Wellness
- Generous paid time off (for vacation, illness, etc.)
- Comprehensive medical/dental insurance
- Employee assistance programs
- Gym memberships
Improvement/Innovation
- Continuing education programs
- Tuition/student loan reimbursement
- Sabbaticals
- Mentorships
Work-life Balance
- Flexible/hybrid work schedules
- Child/elder care
- Parental leave
- Bereavement leave
2 Bonus Frameworks Can Promote Competition or Collaboration
Bonuses that are given for individual performance can create a competitive company culture, especially when reward systems rank employees against each other. If, however, you want a culture that focuses on collaboration and cooperation, a bonus framework based on team impact can be an effective tactic, says McMullen.
3 Behavior-Based Rewards Can Strengthen Core Values
If you only measure and reward results, you’ll create a performance-driven culture. But if you also tie rewards to select behaviors, you can shift the culture toward the attributes your company values most.
For example, if your corporate philosophy focuses on innovation and creativity, you might measure risk-taking and experimentation on performance evaluations. Then you could reward those who take some risks, regardless of the results.
Rewards packages can be financial, such as a bonus or promotion, or non-monetary, like a plum assignment. In both cases, when done well, they can increase employee satisfaction and employee engagement.
“If you’ve got an interesting, meaningful project where an employee gets to work alongside leaders, that can be a very practical way organizations can incentivize and reinforce behaviors,” says McMullen.
4 Employee Recognition Can Build Gratitude and Community
When leaders celebrate a team’s or an individual’s accomplishments, it’s a meaningful public “thank you” that helps create a culture of gratitude.
Similarly, peer-to-peer recognition programs—where employees nominate a colleague “caught in an act of greatness”—strengthen bonds and personal commitments between coworkers. When peers feel seen and validated by one another, it builds a culture of community.
Employee recognition rewards for teams can include social events, team perks, or retreats, while peer-to-peer rewards might use a points-based system that staff members can redeem for merchandise or gift cards. To really boost the impact of a recognition reward, however, McMullen suggests taking a personal approach.
“Talk to the colleagues who know the employee best, or the person’s spouse, to try to provide something with meaning,” he says. If they’re a baseball fan, for example, ask if they might like to have a suite at a game.
5 Fair and Transparent Rewards Can Earn Trust
The way in which you communicate your rewards program can shape your culture. For example, if compensation structures are opaque or confusing, you could inadvertently foster a culture of secrecy or bureaucracy.
On the other hand, when employees understand how rewards are determined and believe the process is equitable, it fosters a culture of trust and openness. This is especially important as some jurisdictions begin implementing pay transparency laws.
“Employees are starting to ask questions like, ‘Why am I still at the bottom of the posted salary range when I’ve been in the position for six years?’ That’s making HR leaders nervous,” says McMullen. Some companies may need to implement new technologies to clean up sloppy processes and improve communication around salary and benefits, as well as other rewards.
“Organizations need to be transparent about how compensation decisions are made so employees understand there’s a method to the madness,” he says.
Start Your Culture Transformation
Find and keep top talent while strategically shaping your culture with a thoughtfully designed total rewards program. By aligning financial and non-financial rewards with organizational values, behaviors, and goals, you can cultivate the workplace culture of your dreams.
Want to get more out of your reward program? Download our Total Rewards Strategy Guide to get practical advice and solutions for the toughest organizational and talent reward challenges.
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