What is Total Reward Statement?

Full Definition

A total reward statement is a document, often issued annually, that sets out the full value of everything an employee receives from their employer, not just their base salary. As well as gross salary, it typically includes the value of any bonus or commission paid, the employer's pension contributions (which can be a substantial add-on, particularly for generous defined benefit or enhanced defined contribution schemes), the cost or estimated value of benefits in kind such as private medical insurance, life assurance, income protection or a company car, plus other perks such as holiday entitlement above the statutory minimum, and access to schemes like cycle to work or salary sacrifice arrangements. Employers use total reward statements partly to improve staff retention and engagement, on the reasoning that employees who only see their salary figure on a payslip may underestimate the true value of their overall package and be more easily tempted by a competing offer with a higher headline salary but weaker benefits. For employees, a total reward statement is a useful tool when comparing job offers or negotiating pay, since a role with a lower base salary but a much stronger pension contribution, health cover and other benefits can sometimes represent better overall value than a higher-salary role with minimal additional benefits, particularly once the long-term value of enhanced pension contributions is taken into account.

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