Download - Employee Reward Strategies
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Reward StrategiesReward Strategies
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RewardsRewardsSayingSaying thankthank youyou for for aa job job wellwell done,done,
andand therebythereby motivatingmotivating thethe recipientrecipient toto
continuecontinue toto dodo thosethose thingsthings thatthat benefitbenefit thetheorganizationorganization
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RewardsRewards
ExtrinsicExtrinsic IntrinsicIntrinsic
ResponsibilityResponsibility
Interesting workInteresting work
Personal growthPersonal growthDiversity ofDiversity ofactivitiesactivities
FinancialFinancial
NonNon--
FinancialFinancial
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1: EXTRINSIC FINANCIAL1: EXTRINSIC FINANCIAL
REWARDSREWARDS
Wages
Bonuses
Profit-sharing
Vacations
Sick leave Purchasediscounts
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2. EXTRINSICNON2. EXTRINSICNON--FINANCIALFINANCIAL
REWARDSREWARDS Office furnishings
Lunchhours
Parkingspaces
Workassignments,
locations
Businesscards Secretary
Titles
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REWARD
STRATEGY
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LAWLERS MODELOF REWARDLAWLERS MODELOF REWARD
STRATEGYSTRATEGY
RESOURCES
ENVIRONMENT
CORPORATEGOALS &
OBJECTIVES
ORGANIZATIONDESIGN
&MANAGEMENT
STYLE
REWARDSYSTEM
INDIVIDUAL &
ORGANIZATIONALBEHAVIUOR
Reward systemReward system An important means ofAn important means of
communicationcommunication
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RELATIONSHIP BETWEENHR & REWARDRELATIONSHIP BETWEENHR & REWARD
PRACTICES & BUSINESS PERFORMANCEPRACTICES & BUSINESS PERFORMANCE
JOBJOB
SATISFACTIONSATISFACTION
EMPLOYEEEMPLOYEE
INVOLVEMENT /INVOLVEMENT /
COMMUNICATIONCOMMUNICATION
BUSINESSBUSINESS
PERFORMANCEPERFORMANCE
HR PRACTICESHR PRACTICES
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DYNAMICREWARDSTRATEGIESDYNAMICREWARDSTRATEGIES
DYNAMIC REWARD
STRATEGIES
RESPONSIBLE, DYNAMIC AND
FLEXIBLE HR
PROFESSIONALS
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ALIGNING REWARDSYSTEM WITH
STRATEGY
BUSINESS
STRATEGY
PEOPLE
REQUIREMENT
PREVIOUS
REWARD
METHODS
CHANGES
TO
REWARDS
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EFFECTIVE REWARDSTRATEGYEFFECTIVE REWARDSTRATEGY
EFFECTIVEEFFECTIVE
REWARDREWARD
STRATEGYSTRATEGY
WELL
DEFINED
GOALS &
OBJECTIVES
WELL DESIGNED
PAY & REWARD
PROGRAMMES
ACCORDING TO THENEEDS
EFFECTIVE &
SUPPORTIVE
HR
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CONFLICTSCONFLICTS
Focus on individual performance inteams
Lack of customer service rewards Lack of relationship between pay &
performance
Absence of learning and development
Pay levels and benefits entitlementstrongly related to the length of service
Lack of variable portion in pay
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PERFORMANCE RELATED PAYPERFORMANCE RELATED PAY
Scorecarddriven bonusScorecarddriven bonus
Customer satisfaction(customer survey)
Shareholder returns
(profitability vs. targets)
Process excellence
Learn n Grow
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Reward Policies
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Reward Policies
Reward Policies provide guidelines for the
implementation of reward strategies and the designand management of reward process.
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Considerations
The level of reward
The relative importance attached to market
rates and equity Attraction and retention
The relationship of rewards to business
performance Total reward policy
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Considerations
The scope for the use of contingent rewards related toperformance, competence, contribution or skills.
Assimilation policies
The degree of flexibility required.
The role of line managers.
Involve employees in the design of reward systems
Communicate the reward policies to employees
Transparency.
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Level of Reward
Organizations philosophy about Rewards:
High payer, Average , Below Average
Policy depends on a number of factors: Level of performance
Competition for good quality people
Tradition stance & organizational culture of thecompany
Affordability
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Market Rate and Equity
Policy needs to be formulated on the extent towhich rewards are market driven rather than
equitable. Obtain and keep high quality staff
Response to market pressures
Market considerations will derive levels ofpay in the organization.
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Attraction policies
Career prospects
Training and development
Intrinsic interest of the work
Flexible working arrangements
Work life balance
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TalentManagement Policies
TalentManagement Process:
Employer of Choice
Recruitment procedures
Designing jobs and roles
Opportunities to develop skills
Working environment
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TalentManagement process
Work life balance
Leadership qualities of line managers
Recognition Conducting talent audits
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Reward to Business Performance
Link between reward and business performance.
Gain sharing A commitment to employee involvement that ties additional
pay to improvements in workforce performance.
Profit sharing A plan under which an employer pays to eligible employees,
as an addition to their normal remuneration, additional sumsin the form of cash or shares in the company related to the
profits of the business.
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Total Rewards
The total reward policy should state thatalthough contingent rewards play an
important part in the reward policies of theorganization other forms of non financialreward are regarded as being equallyimportant
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Contingent Rewards
Pay for individual that is related to
performance, competence, contribution orservice.
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Assimilation Policies
How existing employees should beassimilated into revised pay structure.
Red circling (identifying and dealing withoverpaid people)
Green circling (identifying and dealing with
underpaid people)
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Flexibility
Flexing Company Cars
Trading up
Trading down Trading out
Flexible Holidays
Flexible Pensions
Flexible private medical Insurance
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Role of lineManagers
Direct interaction with employees
Trained
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Involving Employees
Employees should be given voice in thedesign and management of reward processes.
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Communication to Employees
Reward processes are powerful media forconveying messages to employees about the
organizations values and the contributionthey are expected to make in upholding thosevalues and achieving the organizations goals.
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Transparency
Reward process should not be secret activity.
Pay progression
Lack of understanding breeds suspicion.