Modern scholars of employment law and human resource management converge in their opinion that the key factor of successful performance of any enterprise, both goods- and services-oriented is the effective and reliable human resources. Moreover, dynamic changes in the productive cycle of the modern business entities clearly suggest that technological background of the companies is no longer a factor of the paramount importance, whilst the staff of the business structures have become the aspect that can lead either to prosperity of the company or to its bankruptcy otherwise. In addition, specific commercial entities, which are focused on providing head-hunting services, have emerged on the industrial horizon of the human-kind. They target the companies, for which professional and to-quality human resources are the key factors of their market competitiveness and overall successful performance, i.e. the legal, auditing and Informational Technologies companies. To highlight the gravity and importance of the discussed issues, it seems to be sufficient to mention that the annual salaries of the top-managers of the international auditing giant DLA Piper are equal to the salaries paid to the Human Resource Management of this company. Human Resource agents wage highly intricate campaigns in order to recruit the new workforce and to retain the recruited one, whilst the closest competitors from PWC (PriceWaterhouse Coopers ) do not doze  and launch new strategies and tactics to entice away the brightest talents.          

Another hot human resource battlefield is the cozy walls of educational establishments, where the head hunters of the companies’ prowl are relentlessly seeking and hiring the most academically accomplished talents. Herein the most advanced and sophisticated techniques of brainwashing and human psychology are being employed by the agents in order to urge the prospective white collars to sign the employment contracts.     

However, the key factor of all contemporary human-oriented industries is neither to hire, nor to retain the most qualified and talented professionals. Indeed, the importance of these factors is immense and in any case shall be underestimated, but the majorly prioritized objective is the motivation of the workforce to progress and hereby to contribute to the prosperity of the company. In order to succeed in this objective, various methods have been devised by the human resource scholars in cooperation with the leading practitioners of the field. The doctrine of Total Rewards job attraction purports the combination of the five integral components. To be more precise, the implementation of this doctrine purports the exploration and leveraging of compensation package, benefits, work-and-life balance, performance and recognition approach and development and career opportunities scheme of encouragement. These methods of employees’ encouragement and motivation have been elaborated in the course of industrial and technological revolution and evolution, and various scholars have different opinions regarding their effectiveness and their combined utilization.

The aim of this paper is to outline the major components of the discussed elements of the Total Rewards Strategy, to provide the evaluation of each component, and to design the most accomplished and efficacious model of employee motivation, with regard to the contemporary scholarly opinion and international business practice.

Literature Review    

For the purposes of this essay, the following scholarly studies have been utilized.

Sturman, M.C., Short, J.C. (2000).Lump-sum bonus satisfaction: Testing the construct validity of a new pay satisfaction dimension. Personnel Psychology, 53: 673-700.

The study provides a detailed comparative review of the differences that have been made to the payment system and the methods utilized by the companies in order to motivate the employees within the latest century. The different approaches taken by different business owners in different countries have been analyzed and compared; based on the results obtained, inferential conclusions have been encapsulated in this guide.

Welbourne, T., Gomez-Mejia, L.R. (1995). Gainsharing: A critical review and a future research agenda. Journal of Management, 21, 559-609

This study evaluates the efficacy of the compensatory and benefits models of employees encouragement and addresses the question how these models meet the formulated objectives of the enterprise. Generally, the article anticipates future trends of the models at issue and advocates their domination over the non-pecuniary methods of employee motivation.

Williams, M.L., McDaniel, M.A., Nguyen, N.T. (2006). A meta-analysis of the antecedents and consequences of pay level satisfaction. Journal of Applied Psychology, 91:2, 392-413.

The study analyzed pecuniary methods of employee satisfaction from the historical perspective with the accent made on the advantages and disadvantages of the pecuniary (monetary) methods of employee motivation. Although the non-monetary methods and techniques of the employee encouragement and motivation are briefly analyzed, the preference of the author is visibly given to the pecuniary techniques of industrial performance enhancement. This article is one of the primary sources of this essay owing to the fact that it exposes contemporary situation, both practically and theoretically, and provides future evaluation of the motivational models.

Stajkovic, A.D., Luthans, F. (2003). Behavioral management and task performance in organizations: Conceptual background, meta-analysis, and test of alternative models. Personnel Psychology, 56, 155-194.

The contribution of this study to the essay is the fact that it provides a detailed review of the non-pecuniary segments of the Total Rewards strategy. A special accent is made on the importance of the Work-Life balance spectrum and the issues connected to the development and promotions of the employees of the firm. Specifically, international practice has been addressed and the relevant scholarly opinion has been cited and criticized in the light of discrepancies between the theoretical and the empirical approaches.

Shaw, J.D., Gupta, N., Mitra, A., Ledford, G.E. Jr. (2005). Success and Survival of Skill- Based Pay Plans. Journal of Management, 31:1, 28-49

The article serves as the primary source for the aspects of this essay connected to the monetary types of the workforce encouragement and motivational strategies. The major relevance of this study is the fact that the authors are either legal or human resources practitioners and the article is replete with valuable practical evidences, linked illustrations and corresponsive repercussions of the applied methods.

The Concept of Total Reward Strategy

Conceptually, the need to elaborate so complex and sophisticated techniques to attract the new workers and to retain the existing ones was driven by the everlasting objective of the business entities to accrue profits and to develop as a commercial entity. The summarization and encapsulation of the most popular and effective strategies of the employees motivation has been titled Total Rewards Strategy. It encompasses Compensation, Benefits, Work and Life Balance, Performance and Recognition and Development and Career Opportunity aspects.


Sturman and Short (2000) have stressed that the compensatory aspect of the employees remuneration is the most important factor of the overall employees satisfaction. The convergent opinion of the practitioners is that the compensation sector of the Total Reward System includes base pay (salary or wage), merit pay and various performance and annual regular extra payments. Although the majority of scholars and practitioners are firmly convinced that this method of human resources manipulation and encouragement is indeed the most effective, Stajkovic and Luthans (2003) have expressed concern that with the intensified changes in the global perception of the work-related issues the humankind do seem to become less interested in monetary motivational factors in general, and in compensation package in particular. However, it has been inferred that this stipulation fundamentally lacks both profound theoretical background, as well as practical substantiation. 

Overall, the compensatory aspect integrally encompasses a number of positive features, which exercise positive effect on the performance of the employees of a business entity. At the same time, the scholarly research has explicitly indicated that a big number of different negative aspects is reported to be present as well.

The Factors which Contribute to the Encouragement of the Employees

The presence of base payment creates a perception that the employees and their families are financially protected.

This factor is, indeed, the most fundamental one. It is reported that the many companies have substantially changes their payment policies, especially in the legal sector. In other words, the salary, or wage paid to an employee, may be in direct correlation with the scope of the work they completed. Instinctively, the employees, who are enforced to work under this payment model, sense that they and they families do not have any financial guarantees and their failure to comply occasionally with the specific volume of the assigned task may lead to the substantial reduction of the income generated and, therefore, to the deterioration of their living standards.  Shaw and his companions (2005) have expressed the opinion that these factors drive the workers to seek for the job opportunities, which provide steady regular cash inflow, desirably guaranteed under the law.                                               

Therefore, it can be recapitulated that the business units, which provide fixed average salaries with no strict requirements to the work done by the employees, are ultimately in the considerably more advantageous position than their competitors, which follow the result-oriented approach.                                                             

Although some practitioners are preoccupied with the fact that guaranteed income may serve as a “relaxing” factor for the employees, who may become less interested in the results they deliver, the practice indicates that the opposite trend is being reported. The more effectively the payments are guaranteed, the better quality is reported to be delivered.

Extra-Payments (Merit Pay and Best Performance Payments) urge the Employees to Improve Personal Working Qualifications and Work More Intensively

When a company declares the policy that merit payments and best performance payments are provided by the remuneration policy of the company, it is often reported that the employees of the company start to work more in a more dedicated, professional and effective manner.  Moreover, this policy is reported to be especially effective, when the element of completion is added to the campaign, and the employees fervently aspire to outperform each other to be the best and to receive the promotional payment.

The Negative Aspect

As far as the negative side is concerned, it shall be accentuated that this policy may lethally backfire to the financial sector of the company, when the financial inflows of the company are unexpectedly reduced. Recent financial downturn has explicitly exposed the trend that the inability of a company to pay the average amounts of the base payment and to arrange extra merit and best performance payments eventually lead to the leak of the workforce of a firm. To illustrate, after Terrena Inc., one of the leading French agricultural producers, announced the reduction in wages, the employees of the company were easily enticed away by the closest competitors.

Benefits Model of Workforce Encouragement and Motivation

This section of motivational approaches is within the scope of the monetary-oriented techniques as well. Under the principles of this model, the employees of a firm are granted with an additional financial protection, even in case ,when they are not capable of exercising their industrial functions or are temporarily unwilling to do so. To be more precise, this section involves healthcare package, welfare benefit payments and retirement payment policy. Generally, the practice substantiated by the scholarly opinion, clearly suggests that intensified benefits package serves as one of the major deterrent factors when the workers consider re-employment; therefore, it is regarded as one of the most fundamental techniques to retain the employees. In relation to the negative side of this trend, it shall be stressed that this policy can be allowed by the financial giants exclusively.

Non-Monetary Integral Models

Work and Life Policy

Williams and his associates (2006) have explored the sector of non-monetary motivational factors, and the conclusion reached by them is that for modern companies, especially for those, which include high-profile labor of the most qualified professionals, flexible working hours have become the most important factor, which attracts the professionals to join the companies. The positive feature of the trend is that the employees are more satisfied with the job and, therefore, they are automatically less inclined to leave the company.

In relation to the negative aspects of this policy, scholars often point to the fact that the disposal of the human resources of the companies is no longer controlled by the managers, but by the employees themselves. Therefore, the efficacy of the company becomes solely dependent on the reliability and responsible approach of the employees.

Performance and Recognition and Career Opportunities

Although the relevance and validity of this statement is ubiquitously contested by the scientific authorities, it is said that the recognition and promotion are gradually becoming the factors of least importance in the context of employee motivation. With the global perception that the revenues accrued do not necessarily depend on the position the person occupies (to illustrate, the difference in wages accrued by the senior and middle software developers of the IT companies is less than 10%), the aspiration to get promoted at any cost has become obsolete.

The Ideal Model of Motivation

With regard to the factors outlined in the previous sections of this essay, it shall be inferred that an ideal model of employees’ compensation is integrally connected with the type and resources of the company and with the type of the targeted employees.    

For those employees, who are primarily interested in occupying leadership positions within the company, the best technique is to combine the development and compensations models, since both the monetary and non-monetary interests will be satisfied.

For the group concerned with the well-being of their families and less pre-occupied with their personal growth, the introduction of the policy, based on the pecuniary methods will be sufficient.

The last, but not the least group of employees includes those, who aspire to get recognition and acknowledgement for their work and to get this recognition openly proclaimed. The best technique for them is to combine the recognition and compensation models.


Having recapitulated the main elements of the study, the several major inferential consequences can be drawn. First and foremost, it can be said that exclusively monetary-focused models of employee motivation are no longer effective, since the hierarchy of the employee necessities have been altered fundamentally. Besides, with the rapid and unexpected fluctuations of the international economy, it can be rightfully assumed, that the pecuniary-oriented models are to be carefully weighted before launching them, since the financial resources of the majority of the business companies have become extremely limited nowadays.

Moreover, it can be inferred that the application of the motivational models can no longer be generalized. In other words, specific type of a targeted “motivated” employee shall be taken into consideration before the strategy is launched, as “leaders”, in contrast to other employees, require special attitude.

Overall, the major inference is that the successful motivational strategy shall be customized to the needs of the specific enterprise, and in order to elaborate the most effective one, the models shall be combined and mixed.

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