The Link Between Understanding and Appreciation

Posted on August 11, 2009

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otal compensation statements (benefit statements) have real impact. Earlier today I met with a client to plan out their total compensation statement for 2010. In the course of the meeting we reviewed feedback cards that employees returned to the HR department after receiving this year’s total compensation statement. Reviewing the employee feedback made everyone around the table realize the importance of distributing these communications.

Over 25% of employees who received a total compensation statement took the time to send a feedback card and the comments were overwhelmingly positive. But what was really interesting was reading the responses to one of the questions, which asked “what is something new that you learned about your benefits and compensation from the total compensation statement?” Here are some of the responses:

  • I didn’t know that the company paid such a large percentage of the overall cost of my health insurance
  • I learned that the company offers a legal plan
  • I wasn’t aware of how generous the company’s tuition reimbursement plan is

Last year I had the opportunity to speak at a few conferences; my presentation was entitled “If a Tree Falls in the Forest . . . The Case for Total Compensation Communications.” The premise of the presentation was that employees can’t appreciate – or value – what they don’t understand (or what they’re unaware of). Toward the end of the presentation I summarized the case for total compensation communications as follows:

  • Employees don’t understand – and, therefore, do not fully appreciate – the value of the benefits they receive
  • Employee benefits are more effective when they are understood and appreciated
  • Maximize the return on the investment being made in compensation and benefits by communicating to – and with – employees

While our client has an extremely robust program of employee communications and employee engagement initiatives that extend beyond total compensation statements, the statements are a central part of those efforts. Reading employees’ feedback on the statements was a powerful reminder that informing and educating employees through the use of total compensation statements is an investment that is well worth making.