Overall, in the words of Duncan Brown (2001: 44), ‘Reward strategy is ultimately a way of thinking that you can apply to any reward issue arising in your organization, to see how you can create value from it’. More specifically, there are four arguments for developing reward strategies:
- You must have some idea where you are going, or how do you know how to get there, and how do you know that you have arrived (if you ever do)?
- Pay costs in most organizations are by far the largest item of expense – they can be 60 per cent and often much more in labour-intensive organizations – so doesn’t it make sense to think about how they should be managed and invested in the longer term?
- There can be a positive relationship between rewards, in the broadest sense, and performance, so shouldn’t we think about how we can strengthen that link?
- As Cox and Purcell (1998: 65) wrote: ‘The real benefit in reward strategies lies in complex linkages with other human resource management policies and practices’. Isn’t this a good reason for developing a reward strategic framework that indicates how reward processes will be linked to HR processes so that they are coherent and mutually supportive?