Management and Leadership in Nonprofits


Total rewards statements: It’s not just pay

May 10, 2021
By: Lisa L. Corbeille

How much does an employee make? This sounds like a simple question that can be easily answered by accessing your payroll system. But human resources professionals know that the real answer is much more complicated.

The real question is, what is the total financial benefit that an employee receives from the working relationship?

The answer includes the various benefits offered to and used by the employee, as well as pay. The benefits component is not always recognized by employees as a form of compensation that has tremendous value.

Through the course of my professional career, I have had numerous employees who elected to leave for a new opportunity call me and ask for their job back. Why? Because they thought they accepted a new position that would result in higher take-home pay. They soon realized that despite the fact that the wage was higher, their paycheck was lower due to the cost of benefits. These employees learned that compensation was more than simply base pay, and benefits costs were a true part of the total rewards package. The grass wasn’t always greener somewhere else.

Benefits more widely thought of are such things as paid time off, health insurance, life insurance, and short- and long-term disability. Other benefits may not immediately come to mind to employees but are certainly benefits that are extended to employees include: unemployment insurance coverage, workers’ compensation insurance coverage and contributions to Social Security.

Some argue that these benefits are “the cost of doing business.” I think it’s important for employees to understand the total rewards package to increase awareness and understanding of benefits provided.

The value of the total rewards statement

For employees to realize the true value of their employment relationship with you, consider using a total rewards statement (may also be known as a benefit statement). Total rewards statements illustrate the total monetary benefit the employee receives from working for your organization. They’re usually illustrated by listing the pay or benefit in one column and its monetary value in the next column. At the end, there is a total.

For employees, this is usually an eye-opening document that allows comparison between gross pay and actual pay when benefits are included. If you want to go a step further, include information on benefits with no monetary value, such as work schedule flexibility, volunteer pay, telecommuting and related types of benefits.

Total rewards statements have become more widespread with the advent of HRIS systems. Often, these systems are easily able to generate this powerful tool.

How a total rewards statement can help reduce turnover

Educating your employees about their true compensation, which includes the value of their benefits, can be a great retention tool as well as a good recruitment tool. A good time to send out a total rewards statement to employees is at the first of the year so you can use total wages earned in the previous year.

You may also wish to discuss the total compensation package with your employees if they are looking to leave the organization. By extending yourself, you may be able to help your employee do a side-by-side comparison of the two opportunities. Your employee may find that it is in their best financial interest to remain with your organization. And, if it is determined that an employee will be best served by leaving your organization to pursue a new opportunity, wish them well and invite them back should that grass truly not be greener.

Plus, if the employee allows you to evaluate the two opportunities, you have gathered critical intel that can help you to revisit your compensation and benefit packages.

Other retention best practices

Retaining qualified talent is critical to the success of nonprofit organizations. By ensuring employees are paid equitably and competitively, employers can retain qualified candidates, instill a culture of increased creativity and productivity, and reduce turnover.

One way to establish equitable and competitive pay practices is to conduct a competitive pay equity analysis. And that’s why Wipfli has put together a sample RFP. Click here to learn more.

Sign up to receive additional nonprofits content and information in your inbox, or continue reading on:


Lisa L. Corbeille, MBA, SPHR, CCP
Manager, Organizational Performance
View Profile
Management and Leadership in Nonprofits blog
Subscribe to Management and Leadership in Nonprofits