Reward Management
Reward management is concerned with the formulation and
implementation of strategies and policies, the purposes of which
are to reward people fairly, equitably and consistently in
accordance with their value to the organization and thus help the
organization to achieve its strategic goals. It deals with the
design, implementation and maintenance of reward systems (reward
processes, practices and procedures) that aim to meet the needs of
both the organization and its stakeholders.Reward Management
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reward people according to what the organization values and
wants to pay for; reward people for the value they create; develop
a performance culture; motivate people and obtain their commitment
and engagement; help to attract and retain the high quality people
the organization needs; create total reward processes that
recognize the importance of both financial and non-financial
rewards; Aims
develop a positive employment relationship and psychological
contract; align reward practices with both business goals and
employee values; as Brown (2001) emphasizes, the alignment of your
reward practices with employee values and needs is every bit as
important as alignment with business goals, and critical to the
realization of the latter; should be operated fairly, equitably and
transparently
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Reward management is based on a well-articulated philosophy a
set of beliefs and guiding principles that are consistent with the
values of the organization and help to enact them. These include
beliefs in the need to achieve fairness, equity, consistency and
transparency in operating the reward system. The philosophy
recognizes that if HRM is about investing in human capital from
which a reasonable return is required, then it is proper to reward
people differentially according to their contribution (ie the
return on investment they generate).
The philosophy of reward management
The philosophy of reward management recognizes that it must be
strategic in the sense that it addresses longer-term issues
relating to how people should be valued for what they do and what
they achieve. Reward strategies and the processes that are required
to implement them have to flow from the business strategy.
Cont,,,,,,,,,,,,,,,,,
Reward management adopts a total reward approach, which
emphasizes the importance of considering all aspects of reward as a
coherent whole that is integrated with other HR initiatives
designed to achieve the motivation, commitment, engagement and
development of employees. This requires the integration concerning
human resource development. Reward of reward strategies with other
HRM strategies, especially those management is an integral part of
an HRM approach to managing people.Cont,,,,,,,,,
A reward system consists of: Policies that provide guidelines on
approaches to managing rewards. Practices that provide financial
and non-financial rewards. Processes concerned with evaluating the
relative size of jobs (job evaluation) and assessing individual
performance (performance management). Procedures operated in order
to maintain the system and to ensure that it operates efficiently
and flexibly and provides value for money.
THE ELEMENTS OF REWARD MANAGEMENT
It sets out what the organization intends to do in the longer
term to develop and implement reward policies, practices and
processes that will further the achievement of its business
goals.
Reward strategy
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These are rewards that 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. Non
financial rewards
Reward strategy is a declaration of intent that defines what the
organization wants to do in the longer term to develop and
implement reward policies, practices andprocesses that will further
the achievement of its business goals and meet the needs of its
stakeholders. Reward strategy provides a sense of purpose and
direction and a framework for developing reward policies, practices
and process.
Reward strategy defined
It is based on an understanding of the needs of the organization
and its employees and how they can best be satisfied. It is also
concerned with developing the values of the organization on how
people should be rewarded and formulating guiding principles that
will ensure that these values are enacted.
Cont..
Reward strategy is underpinned by a reward philosophy that
expresses what the organization believes should be the basis upon
which people are valued and rewarded. Reward philosophies are often
articulated as guiding principles.Cont,,,,,,,,,,,
Guiding principles define the approach an organization takes to
dealing with reward. They are the basis for reward policies and
provide guidelines for the actions contained in the reward
strategy. Guiding principals,,,,,,,,
They express the reward philosophy of the organization its
values and beliefs about how people should be rewarded. Members of
the organization should be involved in the definition of guiding
principles that can then be communicated to everyone to increase
understanding of what underpins reward policies and practices.
Reward guiding principles may refer to concerns such as:
Cont,,,,,,,,,,,,,,,,
developing reward policies and practices that support the
achievement of business goals; providing rewards that attract,
retain and motivate staff and help to develop a high performance
culture; maintaining competitive rates of pay; rewarding people
according to their contribution;
Guiding principals
recognizing the value of all staff who are making an effective
contribution, not just the exceptional performers; allowing a
reasonable degree of flexibility in the operation of reward
processes and in the choice of benefits by employees; devolving
more responsibility for reward decisions to line managers.
Cont,,,,,,,,,,,,,,,,,
REWARD STRATEGY AND LINE MANAGEMENT CAPABILITY
Grade structure ??????????????
pay structure defines the different levels of pay for jobs or
groups of jobs by reference to their relative internal value as
determined by job evaluation, to external relativities as
established by market rate surveys and, sometimes, to negotiated
rates for jobs. Pay structure
It provides scope for pay progression in accordance with
performance, competence, contribution or service. There may be a
single pay structure covering the whole organization or there may
be one structure for staff and another for manual workers, but this
is becoming less common. There has in recent years been a trend
towards harmonizing terms and conditions between different groups
of staff as part of a move towards single status.
Cont,,,,,,,,,,,,
This has been particularly evident in many public sector
organizations in the UK, supported by national agreements on single
status. Executive directors are sometimes treated separately where
reward policy for them is decided by a remuneration committee of
non-executive directors.Cont,,,,,,,,,,,,,,,
Grade and pay structures should be: capable of adapting to
pressures arising from market rate changes and skill shortages;
facilitate operational flexibility and continuous development;
clarify reward, lateral development and career opportunities; be
constructed logically and clearly so that the basis upon which they
operate can readily be communicated to employees; enable the
organization to exercise control over the implementation of pay
policies and budgets.
TYPES OF GRADE AND PAY STRUCTURE
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Contingent
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