104 TOTAL REWARDS FOR TECHNICAL WORKERS

Total Rewards is a promising approach to employee rewards that has recently emerged
from human resource management practice (Fischer, Gross and Friedman, 2003; Gross and
Friedman, 2004; Kantor and Kao, 2004; Lyons and Ben-Ora, 2002; O’Malley and Dolmat-
Connell, 2003; O’Neal, 1998; Petruniak and Saulnier, 2003; Pfau and Kay, 2002; Platt, 2000;
Poster and Scanella, 2001; Thanasse, 2003; Watson, 2003; Zingheim and Schuster, 2001). It is an
approach to rewards management which attempts a comprehensive inclusion of all the rewards
people receive in the workplace. It embraces the “complete employee value proposition”;
including financial rewards such as pay, stock options and benefits; and non-financial rewards
such as training opportunities, interesting work, and support for work/life integration. Total
Rewards has promise for the management of technical people as demonstrated by its application
at IBM (Platt, 2000), Ethicon (Thanasse, 2003) and AstraZeneca (AstraZeneca, 2004). However,
there has been no systematic consideration of Total Rewards in the R&D management literature.
Currently, most thinking about rewards confines itself to “compensation”, which focuses
almost entirely on pay and benefits as the principal rewards an organization can offer workers.
Total Rewards goes beyond that and considers a wide array of other positive results of working
(intrinsic and extrinsic) such as the social stimulation which people receive at work, the
satisfaction they receive from doing their jobs well and the opportunity for learning and
advancement at work. The assumption is that by thinking about rewards in this broader way we
will understand them all, and their relationships to each other, in a more effective way, and this
will lead to more effectively managed organizations. If the full spectrum of rewards and their
real value to employees can be identified, optimal mixes of rewards for those employees can be
designed and offered. For example, in some circumstances spending X dollars to increase
employees’ pay may not be as effective an alternative as investing the X dollars in a much more
effective career progression program that gives workers a strong sense that they are growing and
developing in the organization and that they have a bright future there. Under the Total Rewards
framework we thus can envision trading off pay against career growth opportunities. This tradeoff
might not have been thought of if pay were considered a reward and career growth a part of
training. Total Rewards thus promises to overcome some of the sticking points that are created
by the current set of silos used in human resource management practice.
O’Neal (1998) and Kantor and Kao (2004) divide Total Rewards into four categories as
shown in Table 1. For efficiency of presentation we will use this widely accepted four category
model in this paper. From this we can see the comprehensive nature of Total Rewards.
Proponents of Total Rewards emphasize its value for attracting and retaining workers. If
the full spectrum of rewards offered by an organization is presented to recruits in a structured
way, the organization will be more attractive than will firms which emphasize only pay and
benefits. If the current employees of a firm are kept apprised of the complete set of rewards they
are currently receiving, they will be less likely to find other firms to be attractive alternatives. It
is important to effectively communicate to employees all the rewards they receive from their
work as this cultivates the sense that this set of rewards is not available elsewhere and that this
firm is an “employer of choice”.
Medcof_ASAC2005
105