Creating a Reward Strategy
Creating a Reward Strategy is not easy, which is probably why just under 50% of organisations have an established reward strategy in place.
A big danger with reward strategies is that they can become just a HR wish list, with no indication of what success looks like or how an organisation intends to get there.
The key to success is early engagement. Start by sitting down with senior colleagues to determine what the reward strategy is there to achieve - The Reward Goals. Every list should start with - supporting the achievement of organisational goals. Others might include:
- Recruit and retain the required calibre of staff
- Build strong relationships between pay and performance
- Be flexible to react to change
Once you have completed the list get the senior team to carry out a simple analysis by rating each objective on a scale of 1 to 10. First rate how important each goal is to organisational success, then how effective the organisation is in achieving each goal. This process will quickly allow you to come up with a priority list of key goals which need immediate attention.
Once you have determined the priorities, consider what success would look like if these goals were achieved and what measures could be used to confirm this success.
By involving your senior management team, line managers and colleagues (if appropriate), we generate a balanced perspective on pay, often raising questions like
- Should you be rewarding on a team or individual basis?
and - Are you paying for the ‘how’ an individual performs or the ‘what’ of the results they achieve?
or ideally both.
This exercise invariably features at the start of Reward Strategy development. It acts as a key reference point for future decisions on reward design, helping to ensure that any decisions you make contribute to these established goals.
Our consultants can help you bring objectivity to the design and facilitation of these sessions.
