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How to Develop a Reward Strategy
Transcript of How to Develop a Reward Strategy
What Does This Article Tell us?
What is a reward strategy?
How to determine reward goals and priorities?
How to deliver a reward strategy within realities of your organization?
Reward Strategy Goals
No agreed objectives and success measures
Not prioritized appropriately
Reward Goal become Sr. managers’ or HR function’s
wishes, with no basis in operating reality in the
They May conflict with each other
Use of Gap Analysis
Benefits of the tool
For HR personnel:
Integratiing reward issues in business mainstream
Engaging reward strategy
Prioritize and implement plans
For the organization:
Establish clear process to evaluate impact of reward process
Enhance reward strategies
What’s the tool?
Framework for reviewing, developing and delivering a reward strategy
Practice insights, tips and tools for conducting a reward strategy and
What and Why?
Employers with a defined HR & reward strategy have higher levels of financial perfoormance
The alignment of reward policies & practices with business & HR strategies of the organization, culture &environment
Strategic Reward Pathway
The Reward Strategy therefore
Aims to ensure reward programs are driven by needs of the organization, rather than historical and possibly outdated practices, or reflecting fads or fashions in those practices
Ensures coherent direction to reward & HR practices, preventing mixed messages & uncoordinated initiatives.
Acts as a framework to guide reward practices in different parts of the organization, establishing how much consistency there should be, for example.
Sets out the core principles underlying how the organisation rewards its people, what it values, what it recognises and what it rewards.
Clarifies accountability and ownership for the various reward polices and practices in the organisation, defining not just what success looks like but also who is responsible for which aspects.
Reward Strategy Development
Total Reward Approach
key to success is tailoring your approach to the goals, needs, characteristics and circumstances of your own organization.
Prioritizing Reward Objectives
Gap Analysis & Agreement
One size does not fit all.
A failure to clearly ‘fit’ with the organisation structure can lead to confused responsibilities for reward management
A well-integrated total reward strategy considers the components and relative emphases in the reward package
Line managers’ skills in delivering reward programs.
Employee understanding and support
Building understanding and trust
Ensuring that strategic aims can be delivered in the realities of day-to-day working in the organization
Aligning with & Involving Employees
Aligning with, and involving, employees- Continued
Other methods of developing understood and accepted reward strategies that are delivered in practice include:
Involving employees and their representatives in project design groups
Employee Involvement to determine recognition scheme award winners, and to communicate progress against bonus scheme targets
Training and coaching line managers in reward management processes and skills.
Reward strategy as process
Continuous and evolving process
Comprise of relatively frequent changes, as organizations strive to align their rewards with their shifting business priorities and structures
In successful organizations:
a process of regular evolution, and ‘tweaking’, rather than radical, ‘big bang’ revolutionary interventions
How to develop your Reward strategy??
Diagnosis phase: Reward goals are agreed, current policies and practices assessed against them, options for improvement considered and any changes agreed.
Detailed design phase: Improvements and changes are detailed and initially tested
Testing and Preparation phase
Thereafter, ongoing review and modification
How to develop your Reward strategy??
Checklist For Action
Phase - 1
What do we Need to Reward Our People?
Does it Support the Structure? Is it Consistent?
What is the Nature of Employment Philosophy?
Is it Competitive?
What are the Major Strengths & Weaknesses
Looking to the Future
What are the Key Goals, Priorities, Principles?
What are the Alternatives?
What would the Recommended Components be?
What are the Likely Effects of Making Changes?
Phase - 2
What are the new reward schemes?
How will the Changes be Applied & Integrate?
What do Staff & Stakeholders think of the Proposal?
Will it Actually Work?
Phase - 3
How do we move People?
What Support will Managers Need?
Will we Require New Contracts?
How Should we Brand & Communicate ?
Phase - 4
How well have the Changes been Implemented?
Is the Sequencing & Ordering Right?
How are we Going to Assess the Effectiveness?
How is the Organizational & External Environment Changing?
Many Organization had no Reward Strategies
Integrated & Strategic Approach Gives
Successful Performance Outcomes
Need to be More Than Just Statements
Tools Provided here help to Design & Deliver
It’s a Difficult Process but will Prove Beneficial