Reward strategy should be based on a detailed analysis of the present arrangements for reward, which would include a statement of their strengths and weaknesses. This could take the form of a ‘gap analysis’, which compares what it is believed should be happening with what is actually happening and indicates which ‘gaps’ need to be filled. A format for the analysis is
shown in Table 19.1.
A diagnosis should be made of the reasons for any gaps or problems so that decisions can be made on what needs to be done to overcome them. It can then be structured under the headings set out below:
- A statement of intent – the reward initiatives that it is proposed should be taken.
- A rationale – the reasons why the proposals are being made. The rationale should make out the business case for the proposals, indicating how they will meet business needs and setting out the costs and the benefits. It should also refer to any people issues that need to be addressed and how the strategy will deal with them.
- A plan – how, when and by whom the reward initiatives will be implemented. The plan should indicate what steps will need to be taken and should take account of resource constraints and the need for communications, involvement and training. The priorities attached to each element of the strategy should be indicated and a timetable for implementation should be drawn up. The plan should state who will be responsible for the development and implementation of the strategy.
- A definition of guiding principles – the values that it is believed should be adopted in formulating and implementing the strategy.