Slide 1
1Dear students do you know?
WHAT IS REWARD MANAGEMENT ? OrCompensation & Benefit
Management ?
Compensation?Benefit ?Management?REWARD MANAGEMENT
DEFINED:ByReward philosophyDistributive justiceProcedural
justiceFairnessEquityConsistencyTransparencyStrategic
alignmentContextual and culture fitFit for purposeDeveloping a
high-performance culture
Reward management is based on a set of beliefs and guiding
principles.
Equity
Reward procedures, which are operated in order to maintain the
system and to ensure that it operates efficiently and flexibly and
provides value for money.
For example, a procedure will be used for conducting the annual
pay review.
The starting point of the reward system is the business strategy
of the organization. This identifies the business drivers and sets
out the business goals. It include items such as high performance,
profitability, productivity, innovation, customer service, quality,
price/cost leadership and the need to satisfy stakeholders
investors, shareholders, employees and, in local authorities,
elected representatives.The reward strategy flows from an analysis
of the business driversThe reward strategy will define longer-term
intentions in such areas as pay structures, contingent pay,
employee benefits, steps to increase engagement and commitment and
adopting a total reward approach.34The base rate is the amount of
pay (the fixed salary or wage) that constitutes the rate for the
job. It may be varied according to the grade of the job or, for
shop floor workers, the level of skill required.Employee benefits
include pensions, sick pay, insurance cover, company cars and a
number of other bonus. They consist of elements of remuneration
additional to the various forms of cash pay and also include
provisions for employees that are not strictly remuneration, such
as annual holidaysAllowances are paid in addition to basic pay for
special circumstances (e.g. living in London) or features of
employment (e.g. working unsocial hours).Total earnings (financial
rewards) consist of the value of all cash payments(base pay,
contingent pay and allowances, i.e. total earnings).Total
remuneration consists of the financial rewards represented by total
earnings plus the value of the benefits received by employees.Job
evaluation is a systematic process for defining the relative worth
or size of jobs within an organization in order to establish
internal relativities and provide the basis for designing an
equitable grade structure, grading jobs in the structure and
managing relativities. Market rate analysis is the process of
identifying the rates of pay in the labour market for comparable
jobs to inform decisions on levels of pay within the organization
and on pay structures.Jobs may be placed in a graded structure
according to their relative size. In such a structure, pay is
influenced by market rates, and the pay ranges attached to grades
provide scope for pay progression based on performance, competence,
contribution or service.Define individual performance and
contribution expectations, assess performance against those
expectations, provide for regular constructive feedback, and result
in agreed plans for performance improvement, learning and personal
development.Non-financial rewards do not involve any direct
payments and often arise from the work itself,
for example achievement, autonomy, recognition, scope to use and
develop skills, training, career development opportunities and
high-quality leadership.The internal environment: consists of the
organizations culture and its business, technology and peopleThe
external environment : competitive pressure, globalization, and
changes in demographics and employment.Are relating to theories and
beliefs about strategic management, total reward, human capital
management, the factors affecting pay levels, motivation,
engagement, commitment and the psychological contract.50
