Total Rewards 101: A Simple Playbook for Small Businesses

Why this matters

If you employ people, you compete for talent. You do not need a big budget to make smart choices. You need clarity, consistency, and a plan you can run every year.

Step 1: Define your Compensation Philosophy

Write a one-page statement that covers:

• What you pay for. Skills, scope, performance, or market competitiveness.

• Where you aim against market. For example, pay at market median for most roles and above market for hard-to-hire roles.

• How you increase pay. (e.g. Merit cycles, promotions, and variable pay.)

• What you will not do. (e.g. No off-cycle increases without a business case.)

  
  

Publish this internally so managers can explain it the same way every time.

Step 2: Benchmark your roles the right way

• List your roles with clean titles and clear responsibilities.

• Match each role to a market job in a reputable salary survey or a strong public data set.

• Anchor each job to a range midpoint. Avoid picking a single number.

• Use the midpoint for offers and growth planning. Use the range for flexibility.

Tip. Benchmark the roles you hire the most or the ones that drive revenue first.

Step 3: Create simple salary bands

• Start with 3 to 5 bands for the whole company.

• Give each band a minimum, midpoint, and maximum.

• Place each job into a band based on scope and market value.

• Map each employee into the right band with a plan to move outliers.

Keep it simple at first. You can expand your salary bands as you grow.

Step 4: Choose benefits that add real value

You do not need everything. You need the right mix for your workforce that will add value to your employees.

• Health plan that fits your budget and your team’s usage.

• 401(k) or savings vehicle with a match that encourages saving.

• Paid time off policy that is easy to manage.

• Low-cost, high-impact add-ons. EAP, HSA or FSA, telemedicine, mental health.

  
  

Collect feedback before renewal. Ask employees what they value and what they do not use.

Step 5: Communicate like a human

• Write a one-page Total Rewards overview.

• Share pay ranges for posted roles (if hiring in states with mandatory Pay Transparency laws)

• Give managers talking points for offers, promotions, and reviews.

• Use plain language. No jargon.

  
  

Consistency builds trust. Trust builds retention.

Step 6: Build an annual rhythm

Quarter by quarter:

• Q1. Merit and bonus decisions. Update ranges.

• Q2. Engagement pulse. Address pain points.

• Q3. Benefits planning and vendor negotiation.

• Q4. Open enrollment and next year’s compensation planning.

  
  

Quick wins for small teams

• Standardize job titles.

• Publish salary bands internally (especially if operating under Pay Transparency laws)

• Offer a 401(k) or savings vehicle with automatic enrollment.

• Introduce an EAP and telemedicine.

• Document an off-cycle pay increase policy.

  
  

Common mistakes to avoid

• Negotiating every offer from scratch.

• Hiding pay ranges.

• Letting benefits renew on autopilot.

• Skipping manager training.

• Ignoring internal equity.

How I Can Help

Ready to get your foundation in place fast? The Avoir Company offers a Total Rewards Audit and Roadmap that benchmarks key roles and gives you a clear plan you can execute. Email admin@theavoirco.com to inquire.