Reward strategy may be a broad-brush affair, simply indicating the general direction in which it is thought reward management should go. Additionally, or alternatively, reward strategy may set out a list of specific intentions dealing
with particular aspects of reward management.
Broad-brush reward strategy
A broad-brush reward strategy may commit the organization to the pursuit of a total rewards policy. The basic aim might be to achieve an appropriate balance between financial and non-financial rewards. A further aim could be to use other approaches to the development of the employment relationship and the work environment, which will enhance commitment and engagement and provide more opportunities for the contribution of people to be valued and recognized.
Examples of other broad strategic aims include: (1) introducing a more integrated approach to reward management – encouraging continuous personal development and spelling out career opportunities; (2) developing a more flexible approach to reward that includes the reduction of artificial barriers as a result of over-emphasis on grading and promotion; (3) generally rewarding people according to their contribution; (4) supporting the development of a performance culture and building levels of competence; and (5) clarifying what behaviours will be rewarded and why.
Specific reward initiatives
The selection of reward initiatives and the priorities attached to them will be based on an analysis of the present circumstances of the organization and an assessment of the needs of the business and its employees. The following
are examples of possible specific reward initiatives, one or more of which might feature in a reward strategy:
- the development of a total reward approach in which each aspect of reward, namely base pay, contingent pay, employee benefits and non-financial rewards (which include intrinsic rewards from the work itself), are linked together and treated as an integrated and coherent whole;
- the replacement of present methods of contingent pay with a pay for contribution scheme;
- the introduction of a new grade and pay structure, eg a broad-graded or career family structure;
- the replacement of an existing decayed job evaluation scheme with a scheme that more clearly reflects organizational values and is less bureaucratic;
- the improvement of performance management processes so that they provide better support for the development of a performance culture and more clearly identify development needs;
- the introduction of a formal recognition scheme;
- the development of a flexible benefits system;
- the conduct of equal pay reviews with the objective of ensuring that work of equal value is paid equally;
- communication programmes designed to inform everyone of the reward policies and practices of the organization;
- training, coaching and guidance programmes designed to increase line management capability.