How Total Rewards Programs Can Help Fight Against Toxic Cultures

By
Michelle Dix
,
Senior Vice President
of
Hub International Human Resources Consulting
By
Nancy Martinez
,
Senior Account Manager
of
Hub International Human Resources Consulting

It’s been 20 years since the Total Rewards model was introduced as a way to systematically capture the depth and breadth of tangible and intangible benefits that can make a good work environment great.

During that time – and especially in recent years of full employment, when 96 out of every 100 people who want to work have jobs –  it’s been a highly effective way for employers to articulate how they stand out in a competitive market.

But there’s another need that Total Rewards programs can help address that may not be recognized or acknowledged. Over time, it also can prove to be a great tool to help fix workplace cultures that have, for one reason or another, become toxic.

By various accounts, this is a growing problem. As many as 50 percent of workers consider their work environments toxic, and business pays a steep price when their cultures become poisoned. According to one study, an estimated USD $23.8 billion are lost annually to costs that can be rooted in dysfunction, like absenteeism, health care expenses, lost productivity, and more.

The disrespect, bullying, and lack of civility that are fraying our social structures have been damaging our workplaces, too. Sexual misconduct, discrimination, micromanagement, poor pay, and all the other behaviors and issues that can destroy a business culture make it hard to keep employees, much less recruit new ones, especially when the toxicity can’t be contained.

Remember last fall, when 20,000 Google employees walked off the job to protest “systemic racism and discrimination, including pay equity and rates of promotion, and not just sexual harassment alone?” Well, Google is not alone, or the worst offender. In one survey, over 50 percent of 9,000 tech industry workers ranked the tech industry as having an unhealthy work environment, with Intel (49.5%), Amazon (46.5%), and eBay (44.5%) getting far more thumbs down than Google (23.7%).

Okay, you say, so we agree that toxic cultures are a problem in corporate America, and it goes far beyond just the tech sector. How does a Total Rewards strategy serve as an antidote?

The first challenge is understanding what Total Rewards strategy is and what it isn’t. It isn’t (or won’t fix anything if it is) a way to get around decent pay and regular pay increases, or a front for benefit cost-cutting and risk-shifting. It is the evolution of a system of monetary, beneficial, and developmental rewards that combine compensation and benefits with personal growth opportunities in order to motivate employees in a positive work environment.

How the components are assembled, expanded, and enhanced over time in response to your organization's unique circumstances is the crux of the toxicity cure.

If you’re skeptical that just calling out a laundry list of benefits like telemedicine services and flex time will fix a damaged culture, you’re right to be. Taking stock of your Total Rewards is one thing; what’s more important is identifying what’s missing and what your people need and want most. You can use the Total Rewards strategy as a means to fill the gaps and, at the same time, establish and uphold the positive values you want to be known for over time. That’s how the process of diluting the toxic culture gets underway.

Some of the highest performing organizations utilize the Total Rewards system to take measure of all the tangible and intangible benefits that make your company great to work for – or, they will as you respond and enrich your future benefits offerings to the things that matter to your people.

The better integrated the Total Rewards program, the more effectively it will dilute toxic influences in the workplace. Only 20 percent of employers today have a holistic, fully-integrated Total Rewards strategy. This involves identifying and managing the “rewards” themselves, typically under the categories of compensation, health/wellness benefits, work-life benefits, recognition, performance management, and talent management. This also encompasses strategies for their delivery, their communication, and the audiences to which they are tailored.

The strategy begins with taking a comprehensive inventory of your rewards. Some are going to be the more “standard” benefits that most businesses offer – health and dental, employee assistance programs, telemedicine services. Others speak more to your employee culture and may be determined by employee demographics. Work/life balance is one area to look at, comprised of rewards like flex time, for example, that is a prized benefit by millennials. Others in this category, like paid time off and employee concierge services, may appeal to a range of employee groups.

Other rewards categories may not be as obvious but need to be called out as they are among the intangibles that, to the extent they are supported or not, can make or break a culture. These include service awards and peer recognition awards, but also individual performance awards. Talent development benefits are also critical to put in place and have management truly get behind for their impact against toxic forces. Think leadership training, coaching and mentoring, for example.

If you’re wondering how your Total Rewards might stack up, World at Work, a professional association, conducts an annual survey  of U.S. employers’ programs. Its 2018 survey found the three most popular benefits added to their Total Rewards rosters were telemedicine services (81%); employee discount programs (75%); and elder care resources (67%). Those offered at significantly lower rates were charitable fundraising programs (69%); floating holidays (54%); and on-site fitness centers (52%).    

Ultimately, the pivotal questions should become: Are these the kinds of benefits that matter to our people (versus to management)? Can we ensure everyone understands the spirit that’s behind them?

If you haven’t asked, it may take a while longer to remove the toxicity from your workplace than you’d hoped. Because Total Rewards they don’t need, want or care about, or, more to the point, that just pay lip service to underlying issues, won’t build an environment where everyone comes out ahead.