Obama Understands Total Rewards

Posted on July 23, 2009

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The term “total rewards,” as defined by WorldatWork, means the following:

All of the tools available to the employer that may be used to attract, motivate and retain employees. Total rewards include everything the employee perceives to be of value resulting from the employment relationship.

The most significant elements of all total rewards programs are cash compensation and employee benefits.

President Obama, in his primetime news conference Wednesday night, gave the nation a brief tutorial on total rewards and the relationship between cash compensation and employee benefits:

And that’s why I think [health insurance reform] is so important — not only for those families out there who are struggling and who need some protection from abuses in the insurance industry or need some protection from skyrocketing costs, but it’s also important for our economy.

And by the way, it’s important for families’ wages and incomes.

One of the things that doesn’t get talked about is the fact that when premiums are going up, and the costs to employers are going up, that’s money that could be going into people’s wages and incomes. And over the last decade, we basically saw middle-class families; their incomes and wages flatlined.

Part of the reason is, because health-care costs are gobbling that up. And that’s why I say, if we can — even if we don’t reduce our health-care costs by the $6,000 that we’re paying more than any other country on earth, if we just reduced it by 2 (thousand dollars) or 3,000 (dollars), that would mean money in people’s pockets. And that’s possible to do. But we’re going to have to make some changes.