These are uncertain times for U.S. workers, and performance and productivity are being affected.

Stress and burnout are issues, and not just over job-related concerns. Uncertainty over changing expectations and what's in store for jobs amidst tech-driven change are factors. But financial worries amidst rising living costs create emotional stress at work and away. Financial stress alone produces a weekly loss of seven hours of productivity by workers. The annual cost to employers: $183 billion. Understandably, productivity has become a top priority of 66% among U.S. employers.

There is no easy solution. But one place employers can start is by shifting their perspective. What ultimately drives improved productivity is not always a single perk but rather an environment where people feel genuinely valued. The employee experience, built around rewards and incentives that are closely aligned with clear performance metrics, goes much further than simply a paycheck to bolster productivity and create a financially healthy organization.

The total rewards strategy

Three components are critical to a total rewards strategy that does the job.

The foundation of the program is a mix of compensation, wellness benefits and work-life balance initiatives. Flexible and data-driven, the pieces of the program are tailored to individual needs and holistic in their nature.

Second is an alignment of incentives with performance metrics, established around employee role and business unit. It's key to draw a solid line between rewards and expectations to bolster employee engagement. Equally important is measuring ROI on performance to support fair, data-driven compensation decisions and promote ongoing productivity.

Rewards that are meaningful and fair are the crux of the program as they will engender the employee trust that is critical to success. That requires smart use of data to develop meaningful insights into the workforce so the offerings are relevant and personalized to the individual.

Where to start

More effectively aligning pay – or more broadly, compensation – with performance will do far more than improve retention. It provides employers with a powerful lever for resilience and results. Here are four considerations to bake into the effort.

  1. Make your data work for you. Enterprises are awash in data that is underutilized – 68% of what's available to them, in fact. Yet readily available employee data – from benefits claims patterns to attendance records – is invaluable to identifying employee profiles, one way to customize total rewards. Another way to fine-tune the strategy is through Workforce Persona Analysis, which fine-tunes how an organization sees the unique needs of different generations and personalities. Better use of data enables employers to provide each employee a Quality Employee Experience – key to better engagement and productivity, and company success.
  2. Address financial stress by meeting basic, universal needs. The reality is that offering top tier wellness perks are likely to be less of a performance incentive to employees struggling to cover rising grocery costs. Tools like Total Rewards Hierarchy of Needs are important for structuring plans that respond to basic necessities. Think employee spending accounts to help cover essential expenses. It's also key to offer tools that improve their financial readiness: the better able employees are to make informed decisions, the less money-related stress is a burden that affects their productivity.
  3. Make your leaders more accessible. There's a link between productivity and the extent to which employees feel valued, and that takes more than benefits alone. One-on-one, personal interaction between employees and their leaders is crucial to a culture where people are demonstrably valued. Improved productivity follows.
  4. Find experienced partners. The right advisors will be instrumental in guiding results-driven solutions. This should include an extensive suite of analytical tools and the support to go along with them. Done right, they will help employers with the insights and tools to maximize productivity-to-compensation alignment and bridge the gap between data, strategy and people.

Employers are increasingly pressured as profitability threats collide with a workforce under heightened financial distress. Their best response is to find creative and forward-looking ways to align compensation with performance. Not only will this be good for business, but it will provide a lifeline for culture, retention and resilience.

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