Maximizing the Value of Total Compensation Statements

Posted on July 9, 2009

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Yesterday I spent some time exploring Bing, Microsoft’s answer to Google. As a test, I entered “Total Compensation Statements” in the search box to see what would come up (and was pleased when my firm was close to the top). One of the other results that came back was a blog post from by JC Kovac and Jim Stoeckmann that appeared on WorldatWork’s Compensation Conundrum blog back in May.

In the post, they propose that total compensation statements should evolve from simply listing the costs of various benefits to showing – in a personalized fashion – what benefits each employee actually utilizes and what the value of those benefits are. Jim Stoeckmann writes:

. . . [E]mployers should attempt to fine-tune their messaging in each employee’s TR statement based on an employee’s personal circumstances, the degree to which they have or would be likely to use certain benefits, the level of awareness and utilization of certain benefits and similar themes.

It’s an excellent point. The more a total compensation statement can be customized and personalized to speak in a specific way to individual employees, the more impact it has. As I discussed in an earlier blog post (“The Art and Science of Total Compensation Statements”), creating a high-impact total compensation statement is about much more than gathering and reporting data – it’s about telling a story. And the more personalized that story is for each employee, the better.

I found another blog post through my Bing search (indirectly; it’s cited by Kovac and Stoeckmann in their blog). It is written by Darcy Dees and was posted on the Compensation Cafe blog. Darcy writes:

Employees understand how much they earn in cash. What they frequently don’t understand is the value of the various benefits plans offered. Total rewards statements are an excellent vehicle to show your employees the full amount you pay on their behalf…These statements are an investment, but it’s one that can really pay off.

Investing in employees has its costs, of course, and we know that costs of all sorts are coming under heavy scrutiny as employers remain wary about the economy. But making sure that employees understand the investment that is being made in them – priceless.