share on
Mercer’s Kelvin Lam shares strategies to personalise rewards, embed wellbeing, harness technology, and link performance metrics to create total rewards that are authentic, impactful, and future-ready.
This article is brought to you by Mercer.
As employees’ priorities and expectations continue to evolve, the concept of total rewards has taken on new significance. Today’s workforce expects more than salary and benefits – they seek a holistic approach that combines both monetary and non-monetary elements to create meaningful value.
“A truly holistic approach to total rewards encompasses a comprehensive and integrated strategy that addresses all aspects of employee value and experience, including performance, recognition, career development and growth, and work environment and culture,” says Kelvin Lam, Director, Business Development, Career Consulting, Mercer Hong Kong.
Meanwhile, employee wellbeing has moved from a ‘nice-to-have’ to a strategic imperative. In the new world of work, employees expect comprehensive support for mental, emotional, and physical health. Embedding wellbeing by offering tailored programmes and flexible options, as well as cultivating a culture that prioritises work-life balance can make total rewards authentic and impactful.
“By adopting a holistic approach, organisations can more effectively attract, motivate, and retain talent while fostering engagement and productivity,” adds Kelvin.
Navigating the challenges of personalisation
With today’s diverse workforce, a one-size-fits-all model no longer works. Flexibility and personalisation are now at the heart of modern total rewards.
“Applying the same rewards to all employees without considering their diverse needs and preferences could lead to a waste of company resources and money, and diminish the perceived value of the reward options,” emphasises Kelvin. “Clear communication about rationale, options, and value is essential.”
However, scaling personalised rewards across large organisations is challenging. Kelvin identifies three major hurdles:
- Data complexity: Collecting, managing, and integrating diverse employee data from multiple systems to ensure accuracy and meet the varied expectations of different employee segments.
- Administrative burden: Managing administrative processes that are complex and time-consuming.
- Cost control: Doing more with fewer resources, including fewer people, in a cost-conscious environment.
Here’s where technology plays a critical role. “AI helps to automate tasks, reduce administrative expenses, provide real-time insights, and enhance decision-making. HR leaders can create meaningful employee engagement by using data-driven insights to understand employee preferences and offer flexible, personalised rewards,” elaborates Kelvin.
Measuring the impact of rewards
Designing total rewards is only half the battle – true success lies in understanding the rewards strategy’s impact. Kelvin emphasises that measurement should go beyond cost analysis and focus on how rewards influence employee performance and engagement, and ultimately drives business outcomes.
Mercer’s recent thought leadership report, Reimagining Performance Management in the Age of AI, reinforces this principle. It advocates aligning organisational goals with employee contributions, upskilling managers, and integrating continuous feedback into the rewards framework.
By shifting from traditional, top-down approaches to flexible, employee-centered models powered by AI, organisations can modernise performance management and transform it into performance enablement. This approach ensures rewards are not just distributed but actively linked to growth, engagement, and measurable results.
“Organisations must embrace these changes to build resilient, future-ready performance management systems,” affirms Kelvin.
To measure the impact of a total rewards strategy, he recommends a multi-pronged approach:
- Monitor employee performance outcomes, engagement and satisfaction scores, and retention or turnover rates.
- Link total rewards to both company and individual performance.
- Use continuous feedback loops, such as regular employee engagement surveys, focus groups, or one-on-one sessions to gather the views of the employees.
- Analyse turnover data and exit interviews for deeper insights.
“Combining data analysis with employee feedback enables a well-rounded understanding of the strategy’s impact and supports continuous refinement,” explains Kelvin.
Actionable steps to future-proof total rewards
Kelvin reiterates a proactive, data-driven, and employee-centric approach for compensation & benefits leaders to future-proof their total rewards frameworks:
- Gather employee data and insights to understand diverse needs.
- Adopt a holistic and flexible rewards approach beyond salary and benefits.
- Leverage technology and AI for efficient management and personalisation.
- Align rewards with business goals and culture to drive engagement.
- Communicate transparently and continuously about rewards value.
- Train managers to effectively administer and advocate rewards.
- Review and adapt programmes regularly based on feedback and metrics.
“HR leaders must design flexible, holistic rewards that go beyond pay, supported by technology, and aligned with organisational goals,” concludes Kelvin.
“Transparent communication and manager involvement are key, along with ongoing evaluation and adaptation to ensure the strategy remains relevant and effective for a diverse workforce in a rapidly changing world.”
Want to learn more?
Explore Mercer’s website for deeper insights and practical tools to design total rewards strategies that deliver impact today and resilience for tomorrow.
Image / Provided
share on
