Reward Strategies

By saima aftab

Rewards
Extrinsic
NonFinancial

Intrinsic
Responsibility Interesting work Personal growth Diversity of activities

Financial

REWARD STRATEGY

LAWLERS MODEL OF REWARD STRATEGY

RESOURCES
INDIVIDUAL & ORGANIZATIONAL BEHAVIUOR

CORPORATE GOALS & OBJECTIVES

ORGANIZATION

DESIGN &MANAGEMENT STYLE

REWARD SYSTEM

ENVIRONMENT

Reward system An important means of communication

RELATIONSHIP BETWEEN HR & REWARD PRACTICES & BUSINESS PERFORMANCE

JOB SATISFACTION

EMPLOYEE INVOLVEMENT / COMMUNICATION

BUSINESS PERFORMANCE

HR PRACTICES

DYNAMIC REWARD STRATEGIES

RESPONSIBLE, DYNAMIC AND FLEXIBLE HR PROFESSIONALS

DYNAMIC REWARD STRATEGIES

ALIGNING REWARD SYSTEM WITH STRATEGY

BUSINESS STRATEGY PEOPLE REQUIREMENT

PREVIOUS REWARD METHODS

CHANGES TO REWARDS

EFFECTIVE REWARD STRATEGY

EFFECTIVE REWARD STRATEGY

WELL DEFINED GOALS & OBJECTIVES

WELL DESIGNED PAY & REWARD PROGRAMMES ACCORDING TO THE NEEDS

EFFECTIVE & SUPPORTIVE HR

BALANCED, PRACTICAL REWARD STRATEGY MODEL

EMPLOYERS PERSPECTIVE EMPLOYEES PERSPECTIVE

ORGANIZATION CAPABILITIES BUSINESS STRATEGY ORGANIZATION STRUCTURE

COMPETENCIES

EMPLOYMENT DEAL

DEMOGRAPHICS VALUES

TOTAL REWARD STRATEGY

PAY LEARNING & DEVELOPMENT BENEFITS
WORK ENVIRONMENT

IMPOROVED BUSINESS RESULTS & ALIGNED EMPLOYEE BEHAVIOURS

CONFLICTS
Focus on individual performance in teams Lack of customer service rewards Lack of relationship between pay & performance Absence of learning and development Pay levels and benefits entitlement strongly related to the length of service Lack of variable portion in pay

PERFORMANCE RELATED PAY

Score card driven bonus
Customer satisfaction (customer survey) Shareholder returns (profitability vs. targets) Process excellence Learn n Grow

Reward Policies

Reward Policies
Reward Policies provide guidelines for the implementation of reward strategies and the design and management of reward process.

Considerations
The level of reward The relative importance attached to market rates and equity Attraction and retention The relationship of rewards to business performance Total reward policy

Considerations
The scope for the use of contingent rewards related to performance, competence, contribution or skills. Assimilation policies The degree of flexibility required. The role of line managers. Involve employees in the design of reward systems Communicate the reward policies to employees Transparency.

Level of Reward
Organizations philosophy about Rewards:
High payer, Average , Below Average

Policy depends on a number of factors:

Level of performance Competition for good quality people Tradition stance & organizational culture of the company Affordability

Market Rate and Equity

Policy needs to be formulated on the extent to which rewards are market driven rather than equitable.
Obtain and keep high quality staff Response to market pressures

Market considerations will derive levels of pay in the organization.

Attraction policies
Career prospects Training and development Intrinsic interest of the work Flexible working arrangements Work life balance

Retention policies
Capelli says market determines the movement of employees, not the company Talent management (attraction and retention of quality employees) Talent management policies
To attract employees To develop employees Retain employees Motivate employees

Talent Management Policies

Talent Management Process:
Employer of Choice Recruitment procedures Designing jobs and roles Opportunities to develop skills Working environment

Talent Management process

Work life balance Leadership qualities of line managers Recognition Conducting talent audits

Reward to Business Performance

Link between reward and business performance. Gain sharing
A commitment to employee involvement that ties additional pay to improvements in workforce performance.

Profit sharing
A plan under which an employer pays to eligible employees, as an addition to their normal remuneration, additional sums in the form of cash or shares in the company related to the profits of the business.

Total Rewards
The total reward policy should state that although contingent rewards play an important part in the reward policies of the organization other forms of non financial reward are regarded as being equally important

Contingent Rewards
Pay for individual that is related to performance, competence, contribution or service.

Assimilation Policies
How existing employees should be assimilated into revised pay structure.
Red circling (identifying and dealing with overpaid people) Green circling (identifying and dealing with underpaid people)

Flexibility
Flexing Company Cars
Trading up Trading down Trading out Flexible Holidays Flexible Pensions Flexible private medical Insurance

Role of line Managers

Direct interaction with employees Trained

Involving Employees
Employees should be given voice in the design and management of reward processes.

Communication to Employees
Reward processes are powerful media for conveying messages to employees about the organizations values and the contribution they are expected to make in upholding those values and achieving the organizations goals.

Transparency
Reward process should not be secret activity.
Pay progression Lack of understanding breeds suspicion.

THANKS