Sample Managers Guide to Total Rewards

Sample_Documents

DISCLAIMER: This is a sample template provided for informational purposes only. It does not constitute legal, tax, or financial advice. Organizations should consult their own legal and tax advisors and tailor this document to reflect their specific business needs, geographies, and applicable laws.

Document Header

Field	Details
Title	Manager's Guide to Total Rewards - <Company Name>
Document Type	Manager's Guide to Total Rewards
Category	Communication & Administration
Version	v<Number>.<Number>
Effective Date	<Date>
Last Review Date	<Date>
Next Scheduled Review	<Date> (or every <Number> months)
Document Owner	<Job Title, e.g., Director, Total Rewards>
Document Approver	<Executive Title, e.g., CHRO>
Approval Date	<Date>
Geographic Scope	<Countries/Regions>
Systems in Scope	<Vendor Name> HRIS; <Vendor Name> Payroll; <Vendor Name> Performance; <Vendor Name> Equity

Purpose and Objectives

Provide managers at <Company Name> with practical guidelines to administer total rewards programs consistently, compliantly, and fairly.
Outline the structure and governance of compensation, benefits, recognition, and equity programs.
Clarify roles, responsibilities, and decision rights across managers, Total Rewards, HR Business Partners, Finance, Payroll, and Legal.
Establish key timelines, approval thresholds, and documentation requirements for rewards-related actions.
Support a culture of pay-for-performance, internal equity, and market competitiveness.

Scope and Applicability

In Scope

Base pay administration (salary ranges, offer pay, promotions, merit increases, off-cycle adjustments)
Variable pay programs (annual bonus plans, sales incentives, spot bonuses)
Equity programs (new-hire grants, refresh grants, vesting, administration)
Benefits and wellbeing programs (health, retirement, leaves, insurance, time off)
Recognition programs (peer, manager, and service awards)
Governance (approvals, exceptions, audits, documentation, and reporting)
Communications, training, and change management related to total rewards

Out of Scope

Union or works council agreements that supersede these guidelines where applicable
Executive compensation subject to Board or Compensation Committee authority
Country-specific statutory benefits not administered by <Company Name> (e.g., statutory social insurance claims handled by government entities)
Non-employee worker arrangements (contractors, interns, agency workers), unless explicitly covered in a separate policy

Applicability

Applies to all people managers at <Company Name> who make or recommend pay and rewards decisions.
Program specifics may vary by country, legal entity, job family, and employment status. Where differences exist, local addenda take precedence.
Where a plan document exists (e.g., annual bonus plan, equity plan), the plan document governs in case of conflict.

Legal Notice: Nothing in this guide creates a contract of employment. Employment at <Company Name> is at-will in <Country> where permitted by law, and employment terms may be modified at any time with or without notice in accordance with legal requirements.

Guiding Principles

Market-Competitive: Target pay positions jobs competitively to relevant labor markets identified by <Company Name>.
Pay for Performance: Differentiated rewards align with individual and company performance.
Internal Equity: Comparable work receives comparable pay, considering experience, skills, performance, and geography.
Transparency and Simplicity: Programs are easy to understand and administer; documentation is clear and timely.
Compliance: Programs comply with applicable laws, tax rules, data privacy, and reporting obligations in each <Country>.
Fiscal Responsibility: Rewards are aligned to budget, affordability, and shareholder value.
Inclusion and Fairness: Decisions are free from bias and regularly audited for equity and consistency.

Roles and Responsibilities

People Managers

Make pay recommendations within established ranges and budgets.
Conduct fair, timely, and well-documented compensation discussions with employees.
Partner with HRBP and Total Rewards to address pay issues and exceptions.
Maintain confidentiality of compensation and personal data.
Approve recognition awards within delegated authority and budget.

Total Rewards (TR)

Design, govern, and maintain total rewards programs and pay structures.
Conduct market benchmarking and set salary range structures by job family and level.
Administer annual cycles (merit, bonus, equity) and produce planning tools.
Review and approve pay actions per approval matrix; manage exceptions and audits.
Provide training, communications, and analytics to stakeholders.

HR Business Partners (HRBP)

Advise managers on policy application, talent decisions, and pay equity.
Facilitate calibration sessions and ensure consistent application across teams.
Support employee communications and handle sensitive escalations.

Finance

Set and validate reward budgets and accruals; ensure financial controls.
Approve funding for exceptions that impact budgets and forecasts.

Payroll

Process approved pay changes accurately and on schedule.
Maintain earnings codes and local compliance with tax and wage laws.

Legal/Compliance

Advise on regulatory requirements (e.g., equal pay, overtime, equity compliance, data privacy).
Review plan documents and communications for legal sufficiency.

Total Rewards Framework

Job Architecture and Salary Structures

Roles are assigned to job families and levels (e.g., L1–L8) with defined responsibilities, scope, and impact.
Each level has a market-informed salary range with minimum, midpoint, and maximum. Ranges are typically refreshed every <Number> months using <Survey Source Names> market data.
Geographic differentials may apply for designated locations (e.g., <Percentage> differential for <City/Region>).
Typical range width examples: 50%–70% for professional levels; 60%–80% for leadership levels. Actual widths are set by <Company Name> based on market volatility and career architecture.

Note: Salary ranges represent pay opportunity, not entitlement. Pay placement depends on skills, performance, and internal equity.

Base Pay Administration

Offers at Hire: Target between 85%–100% of range midpoint for fully qualified candidates; up to <Percentage> above midpoint requires pre-approval per the approval matrix.
Compa-Ratio Management: Aim to cluster sustained performers between 90%–110% of midpoint over time to support internal equity.
Red-Circle/Green-Circle: If an employee’s base pay exceeds range maximum, future increases should be delivered as lump-sum until range changes. If below minimum, adjust to minimum at next cycle or earlier if required by law or policy.
Geographic Moves: Adjust pay per the receiving location’s range and differential, effective on transfer date, unless prohibited by local law.

Annual Merit Cycle

Merit budgets are set annually by Finance and TR (e.g., <Percentage>% company-wide with guidance by function based on market movement and performance distribution).
Employees on a performance improvement plan as of <Date> are typically not eligible for merit increases.
Proration applies for employees hired after <Date> (e.g., hires after <Month/Day> receive prorated or no merit per cycle rules).
Use compa-ratio and performance rating to differentiate increases consistent with guidelines.

Performance Rating	Example Merit Range	Notes
Far Exceeds Expectations	4.0%–6.0%	Lumpsum if compa-ratio ≥ 1.05 or above range max
Exceeds Expectations	3.0%–5.0%	Focus on moving toward midpoint
Meets Expectations	2.0%–4.0%	Consider internal equity and market position
Partially Meets Expectations	0.0%–1.5%	Consider targeted development plan
Does Not Meet Expectations	0.0%	Generally ineligible

Illustrative guidance only. Replace with <Company Name>-specific ranges and eligibility rules.

Variable Pay: Annual Bonus Plan

Eligibility: Employees in eligible roles as of <Date> with at least <Number> months of service. Leaves of absence and employment status changes may result in proration per plan document and local law.
Target Opportunity: Defined by level or job family (e.g., L4 = 10%, L5 = 15%, L6 = 20% of eligible earnings). Replace with <Percentage> targets per <Company Name>.
Funding: Company/BU scorecard funds the plan based on results (e.g., revenue, operating income, strategic metrics). Funding typically ranges from 0%–200% of target.
Individual Modifier: Performance rating or goal achievement may adjust payouts within a range (e.g., 0.8x–1.2x).
Proration Rules: Hires after <Date> and employees on unpaid leaves may be prorated for time worked; terminations before payout typically forfeit unless local law requires payment.
Payout Timing': Typically within <Number> days following fiscal year close, subject to Board approval and applicable tax withholding.

Plan document prevails. Local law may require alternative treatment for payout eligibility, proration, and termination.

Sales Incentive Plans (if applicable)

Align to <Company Name> Sales Compensation Policy and plan documents.
Core components include target incentive (<Percentage> of OTE), measures (e.g., bookings, margin), accelerators, and caps where applicable.
Draws, guarantees, and territory changes follow documented rules and are approved by Sales Leadership and TR.

Equity Compensation (if applicable)

Eligibility: Roles and levels designated by <Company Name> and approved by <Committee Name>.
Vehicles: RSUs, PSUs, or options depending on <Country> taxation and plan design.
Grant Practices: New-hire grants on or after <Date>; annual refresh at <Date>.
Vesting: Typical vesting example: 25% annually over 4 years or 1/16th quarterly over 4 years. Modify per plan.
Performance Awards: PSU vesting contingent on 3-year performance metrics (e.g., revenue CAGR, relative TSR).
All grants subject to plan document, award agreement, securities law, and blackout policies.

Recognition Programs

Spot Awards: Manager-nominated awards for exceptional contributions; typical amounts <Amount>–<Amount> per event. Pre-approval required beyond <Amount>.
Peer Recognition: Non-monetary e-cards or points via <Vendor Name> platform; converted to rewards within monthly caps.
Service Awards: Milestone recognition at <Number> years and subsequent intervals; value determined by policy and tax rules in each <Country>.

Benefits and Wellbeing Overview

Health and Insurance': Medical, dental, vision, life, and disability coverage per <Country> norms and statutory requirements.
Retirement': Defined contribution plan with employer match up to <Percentage> of pay; vesting schedule as per plan.
Paid Time Off': Vacation, sick time, and holidays per policy and local law (e.g., <Number> days annual leave plus <Number> company holidays).
Leaves of Absence': Parental, medical, and other leaves administered per policy and local law; impact on variable pay per plan rules.
Wellbeing': EAP, mental health, wellness stipends (<Amount> per quarter), and fitness reimbursement where offered.

Refer to local benefits summaries and policy documents for detailed terms and eligibility.

Governance and Approval Matrix

All approvals must be documented in the HRIS or approved workflow tool. Email approvals should be attached to the employee record where workflow is not available.

Action Type	Manager Authority	Additional Approvals Required	Documentation
Offer within range up to midpoint	Yes	HRBP and TR for equity or sign-on	Offer letter; range validation
Offer above midpoint up to range max	Recommend	TR approval; Finance if above budget	Offer letter; comp analysis
Offer above range max	No	TR, Finance, and <Executive Title>	Exception form; market justification
Merit increase within guidelines	Yes	HRBP review during calibration	Merit worksheet
Off-cycle market adjustment up to <Percentage>%	Recommend	TR approval; Finance if budget impact	Market pricing; equity analysis
Promotion within guidelines	Recommend	TR and HRBP approval	Promotion case summary
Spot award up to <Amount>	Yes	None	Recognition approval in system
Equity grant per cycle	No	Plan Committee approval	Grant list; award agreements

Pay Decisions: Best Practices

Use current market data and internal equity comparisons for any pay action.
Consider compa-ratio, time in level, performance trend, critical skills, and retention risk.
Document the business rationale clearly and avoid referencing personal financial needs or protected characteristics.
Coordinate timing to minimize pay equity gaps and avoid repeated off-cycle actions.
Validate affordability and forecast impact with Finance.

Offers, Sign-On, and Relocation

Offers and Sign-On Bonuses

Sign-on payments may offset forfeited compensation; structure with repayment clauses for voluntary separation within <Number> months.
Use installment schedules (e.g., 50% on start, 50% at <Month>), subject to tax and clawback terms.
For critical hires, consider RSU new-hire grant in lieu of cash sign-on.

Relocation and Remote Work Adjustments

Relocation assistance ranges from <Amount>–<Amount> based on level and distance; use <Vendor Name> for relocation services.
Remote work location changes must be approved by HR, Legal, and Tax to manage PE, withholding, and benefits eligibility.

Promotions and Career Progression

Promotions reflect sustained changes in scope, complexity, and impact; not solely performance in current role.
Typical promotional increase examples: 8%–12% for same family level jump; 10%–15% for cross-family or significant scope increase, aligned to new range and internal equity.
Effective dates align to the start of the next pay period following approval, unless otherwise dictated by local law or payroll cutoffs.
Do not combine merit and promotion increases to exceed guidelines without exception approval.

Off-Cycle Adjustments

Consider when market movement outpaces annual cycle, retention risk is high, or there is a documented pay equity gap.
Use data from <Survey Sources> and internal comp ratios; limit to <Percentage>% unless approved as an exception.
Off-cycle actions should not undermine the annual merit process or create inequities.

Pay Equity and Audits

TR conducts pay equity analyses at least annually and post-merit using regression and cohort checks by job family, level, and location.
Identified gaps are remediated in-cycle or off-cycle depending on severity and legal guidance.
Keep audit files with anonymized data for <Number> years per data retention policy and privacy laws (e.g., GDPR).

Implementation and Annual Calendar

Annual Rewards Cycle Overview

Set ranges and budgets with Finance and ELT by <Month>.
Publish manager training and planning tools by <Month>.
Launch performance calibration sessions by <Month>.
Open merit/bonus planning in <Vendor Name> tool by <Month>.
Complete manager approvals and HRBP reviews by <Month>.
Finalize executive approvals and load to Payroll by <Date>.
Communicate increases and bonuses to employees by <Date>.
Pay merit changes effective <Date> and bonuses on <Date>.

Payroll Cutoffs and Effective Dates

Standard cutoff: submit approved changes by <Day of Month> for the <Pay Period> payroll.
Retroactive changes require TR and Payroll approval; limit retros to <Number> pay periods.

Systems and Data Quality

Use <Vendor Name> HRIS as the system of record; ensure job codes, grades, and locations are accurate before planning.
Validate completion of performance ratings in <Vendor Name> Performance to enable bonus calculations.
TR provides exception reports for missing or out-of-range transactions.

Manager Guidance for Conversations

Prepare with data: current salary vs. range, performance feedback, internal equity context, and development plan.
Be specific about the rationale and link to performance and market.
Do not make commitments outside approved amounts or discuss others’ pay.
If questioned on fairness, explain the process and factors considered; offer to follow up with HRBP if needed.
Document the discussion in <System Name> where required.

Compliance and Risk Management

Classify employees correctly as exempt/non-exempt per <Country> law (e.g., FLSA in the U.S.).
Ensure minimum wage, overtime premiums, and working time rules are met in each <Country>.
Observe pay transparency and salary range disclosure laws where in effect; coordinate with Legal on postings.
Equity awards must comply with securities laws, insider trading policy, and local tax reporting.
Data privacy: handle personal data per <Company Name> Privacy Policy and applicable laws (e.g., GDPR, CCPA).
Maintain audit trails of approvals and calculations for <Number> years.

Legal Disclaimer: In the event of conflict between this guide and a plan document, employment agreement, collective agreement, or local law, the latter governs.

Budgeting and Financial Controls

Finance sets aggregate budgets for merit (e.g., <Percentage>% of eligible payroll), bonus funding ranges, and equity value pools by level.
TR monitors utilization and produces variance reports during planning windows.
Exception approvals must identify funding sources (savings, reallocation, or incremental spend) and forecast impact.

Reporting and Analytics

Standard reports: compa-ratio distribution, range penetration, gender and ethnicity pay gap indicators (subject to legal permissions), merit utilization by function, and bonus payout histograms.
Post-cycle reviews include cost vs. budget, differentiation analysis, and pay equity remediation outcomes.
Dashboards in <Vendor Name> provide managers with team-level insights and drill-downs.

Country-Specific Addenda

Local addenda specify statutory requirements, benefit norms, severance rules, and constraints on variable pay, equity, and termination.
Managers must consult local HR for country-specific rules and translations where required.
Examples:
- <Country>: 13th-month pay requirements and treatment in bonus eligibility.
- <Country>: Works council consultation for policy changes.
- <Country>: Mandatory meal vouchers and commuting subsidies.

Training and Change Management

TR conducts annual manager training covering policy changes, tools, and timelines.
Microlearning modules available in <LMS Vendor Name> for on-demand refreshers.
Change impacts are assessed, and stakeholder maps maintained for major program updates.

Exceptions and Escalations

Exceptions must be rare, justified by business need, and supported by data.
The exception request includes employee details, action requested, rationale, market and internal equity data, and budget impact.
Escalation path: Manager → HRBP → TR → Finance → <Executive Title>.
TR maintains a log of all exceptions for audit and continuous improvement.

Review and Approval Process for This Guide

Document Owner: <Job Title> in Total Rewards.
Review Cadence: At least annually or upon significant legal or program changes.
Stakeholder Review: HR Leadership, Finance, Legal, and Regional HR.
Approval: <Executive Title> or <Committee Name>.
Publication: Posted on <Intranet Site Name> with version control and change log.

Version	Date	Summary of Changes	Approved By
v1.0	<Date>	Initial release	<Executive Title>
v1.1	<Date>	Updated merit guidance; added pay transparency compliance	<Executive Title>

Glossary of Terms

Compa-Ratio: An employee’s pay divided by the midpoint of the salary range for the job. A compa-ratio of 1.00 indicates pay at midpoint.
Market Pricing: The process of benchmarking roles to external survey data to determine competitive pay levels.
Midpoint: The market-aligned reference point in a salary range representing competitive pay for a fully proficient performer.
Range Penetration: Position of an employee’s pay within the range, expressed as a percentage from minimum to maximum.
OTE: On-Target Earnings (base plus target incentive), commonly used for sales roles.
PSU/RSU: Performance Stock Units and Restricted Stock Units, forms of equity compensation with performance or time-based vesting.
Proration: Adjusting a payout based on time worked or status changes within an eligibility period.
Calibration: A process for aligning performance ratings and pay decisions across teams to ensure fairness and consistency.
Blackout Period: Timeframe during which trading or granting of securities is restricted due to insider information.
Total Rewards: The full set of monetary and non-monetary rewards, including pay, benefits, recognition, development, and work experience.

Appendices

Appendix A: Manager Pre-Submission Checklist

Validate job, grade, and location in HRIS.
Confirm salary range, midpoint, and compa-ratio.
Review internal equity comparators and time-in-level.
Check eligibility rules and proration for merit/bonus/equity.
Attach supporting documents (market data, rationale, approvals).
Submit via <System Name> by the published cutoff.

Appendix B: Sample Manager Conversation Script

Acknowledge performance contributions and link to outcomes.
Explain how the market and internal equity informed the decision.
Share the effective date, new base pay, and any variable pay outcomes.
Outline development focus and career path next steps.
Invite questions and offer follow-up resources.

Communication to Employees and Managers

This section is intended for end-users and may be shared broadly. Customize the language to align with your culture and voice.

At <Company Name>, our total rewards are designed to recognize your contributions, support your wellbeing, and foster long-term growth. We strive to keep our programs clear, competitive, and fair across all locations where we operate.

Your base pay is aligned to a salary range for your role, reflecting the skills and responsibilities of the job and the external market in your location. Over time, as you grow in your role and deliver results, your pay may progress within the range. When you change roles or locations, we review your pay to ensure it fits the new responsibilities and local market.

Each year, we run our annual rewards cycle. During this time, your manager reviews performance outcomes and makes pay recommendations guided by company budgets and market data. If eligible for a merit increase, changes typically take effect on <Date>. If you participate in a bonus plan, we communicate outcomes after the fiscal year closes and results are approved. Bonus payouts reflect both company performance and your individual contributions, as described in the plan document.

In addition to base pay and bonuses, many roles are eligible for equity awards that align your interests with the long-term success of <Company Name>. Equity programs have vesting schedules and other rules outlined in your award agreement and plan document. If you receive an equity grant, we will provide clear details and resources to help you understand how it works.

We offer a comprehensive benefits package to support your health, family, and financial security. Depending on your location and employment status, this may include medical coverage, retirement plans with employer contributions, paid time off, and access to wellbeing resources like our Employee Assistance Program. Your local benefits guide provides a full overview of what is available to you.

Recognition is part of how we celebrate great work. Your manager can nominate you for spot awards tied to meaningful contributions, and you can recognize peers through our <Vendor Name> platform. Service awards mark key milestones in your career with <Company Name>.

We are committed to equity and inclusion. We regularly review pay decisions to help ensure employees in similar roles are rewarded fairly, considering experience, performance, and location. If you have questions about your pay, talk with your manager or HR Business Partner. We welcome the conversation and are happy to explain the factors considered.

Here is what to expect during the annual rewards season:

Your manager completes performance reviews and calibration with leadership.
We finalize budgets and open the planning window.
Your manager shares pay outcomes with you by <Date>.
Any increases take effect on <Date>, and eligible bonuses are paid on <Date>.

To prepare for your discussion, consider your accomplishments, impact, and goals for the year ahead. Think about the skills you want to build and the opportunities that will help you grow. Your development plan plays an important role in long-term career progression and pay growth.

If you receive a pay change or bonus, your manager will explain the rationale, effective dates, and where to find details in <System Name>. You can also review your payslip in <Payroll Vendor Name> for confirmation.

Please remember that laws and program rules can vary by country. In the event of a difference between this overview and a plan document or local policy, the plan or local policy will govern. If you move to a new country or change employment status, your eligibility for certain programs may change.

Thank you for your contributions to <Company Name>. Your work makes a difference, and our total rewards are one way we recognize and support that. For questions, contact your manager, HR Business Partner, or visit <Intranet Site Name> for resources and FAQs.

Document Information:

Document Type: Manager's Guide to Total Rewards
Category: Communication & Administration
Generated: August 28, 2025
Status: Sample Template
Next Review: <Insert Review Date>

Usage Instructions:

Replace all text in angle brackets < > with your company-specific information
Review all sections for applicability to your organization
Customize content to reflect your company's policies and local regulations
Have legal and HR leadership review before implementation
Update document header with your company's version control information
At bottom of the document you find a short example on how the content could be communicated to end-users, for instance employees.

This sample document is provided for reference only and should be customized to meet your organization's specific needs and local legal requirements.