Reward Strategies

What is meant by a reward strategy?

Usually it is a combination of the policy, process and practices of how people are paid in order to achieve company goals. The current most important reward strategies are as follows: Performance Related Pay Competence Related Pay Skill Based Pay Team Pay

Definition:
Reward strategy clarifies what the organization wants to do in the longer term to develop and implement reward policies, practices and process that will further the achievement of its business goals.

Purpose of reward strategy

To support the corporate hr strategies Align reward policies To processes individual and organizational needs. Integrating and institutionalized mechanisms for change.

Features of reward strategy

Concerned with direction the organization should follow in developing the right mix.

The characteristics of reward strategy

Characterized by - Diversity - And conditioned All reward strategy are different as organizations are different.

Guiding principles
Guiding principles defines the approach an organization takes to dealing with reward. It express the philosophy of the organization , its value and beliefs about how people should be rewarded. Fundamental values Specific guiding principles

Fundamental values:
Fairness Equity Consistency Transparency

Specific guiding principles:

Developing reward policies Providing rewards that attract, retain and motivate Rewarding people according to their contribution Developing more responsibility for reward decisions to line managers.

Model of reward strategy development process

Analyze business strategy and needs Analyze present HR and forward policies and practices

Developing HR strategy

Assess needs of stakeholders

Develop reward strategy Consult and involve senior management Guiding principle Define and justify intentions Prepare and implement plan Train Consult, involve and communicate with employees

EMPLOYEE BONUS SCHEMES - REWARDS STRATEGY

There are various types of bonus plans that can be put into effect at your business. Bonus schemes and employee rewards strategies are established to fulfill a number of key business and HR objectives: To improve business performance (e.g. productivity, sales or profits) To focus employees efforts on key objectives such as customer service, quality and on-time delivery To increase employee motivation by establishing a clear link between pay and performance (at an individual or team level). To support stakeholder ideals by allowing employees to share in the success of the business To encourage change within the organization. To create the desired workplace culture by, e.g. rewarding teamwork and good attendance.

Effective reward strategy