HHRMP 23 Reward Management.ppt

Document Sample
HHRMP 23 Reward Management.ppt Powered By Docstoc
					             23 REWARD MANAGEMENT

                                   Contents

1    Reward management defined
2    Aims of reward management
3    Reward management processes and activities
4    Reward strategy defined
5    The components of total reward
6    Total reward framework
7    Why have a reward strategy?
8    A structure for reward strategy
9    Reward gap analysis
10   Reward philosophy defined
11   Reward philosophy and principles at B&Q
12   Developing reward strategy
13   Integrated reward strategy in a retail company
              REWARD MANAGEMENT DEFINED



Reward management is concerned with the formulation and implementation of
strategies and policies that aim to reward people fairly, equitably and consistently in
accordance with their value to the organization. It deals with the design,
implementation and maintenance of reward processes and practices that are geared
to the improvement of organizational, team and individual performance.
              AIMS OF REWARD MANAGEMENT



•   Create total reward processes that are based on beliefs about what the
    organization values and wants to provide rewards for.
•   Reward people for the value they create.
•   Align reward practices with both business goals and employee values.
•   Reward the right things to convey the right message about what is important in
    terms of behaviours and outcomes.
•   Facilitate the attraction and retention of the skilled and competent people the
    organization needs, thus winning the war for talent.
•   Help in the process of motivating people and gaining their commitment and
    engagement.
•   Support the development of a performance culture.
•   Develop a positive employment relationship and psychological contract.
   REWARD MANAGEMENT PROCESSES AND ACTIVITIES


                                  Non-financial
                                    rewards



                                      Employee
                                       benefits


                                      Market
                                        rate
                                      analysis

                         Grade and
                                            Grade and
 Business/    Reward         pay                            Total        Total    Improved
                                                pay
HR strategy   strategy    structure                      remuneration   reward   performance
                                             structure
                            policy


                                         Job
                                      evaluation
                                                         Contingent
                                                            pay
                                  Performance                                    Learning and
                                  management                                     development
                 REWARD STRATEGY DEFINED



Reward strategy is a declaration of intent, which expresses what the organization
wants to do in the longer term to develop and implement reward policies, practices
and processes that will further the achievement of its business goals and meet the
needs of its stakeholders.
    THE COMPONENTS OF TOTAL REWARD



                           Base pay
Transactional                                         Total
                        Contingent pay
   rewards                                         remuneration
                       Employee benefits
                                                                   Total reward
                   Learning and development
 Relational                                        Non-financial
  rewards             The work experience            rewards

                Recognition, achievement, growth
                           TOTAL REWARD FRAMEWORK
                                           TRANSACTIONAL
                                             (TANGIBLE)



                           PAY/REWARD                          BENEFITS
                • Base pay                        • Pensions
                • Contribution pay                • Health care
                • Shares/profit sharing           • Perks
                • Recognition                     • Flexible benefits
                 LEARNING AND DEVELOPMENT               WORK ENVIRONMENT
                • Workplace learning              • Core values
                • Training                        • Leadership
                • Performance management          • Employee voice
                • Career development              • Job/work design




Adapted from Duncan Brown and Michael        RELATIONAL
Armstrong (1999) Paying for Contribution    (INTANGIBLE)
            WHY HAVE A REWARD STRATEGY?



•   Must have some idea where you are going, or how do you know how to get
    there, and how do you know when you have arrived (if you ever do)?
•   Pay costs are almost always by far the largest item of expense, so doesn’t it
    make sense to think about how they should be managed in the longer term?
•   There is a positive relationship between rewards and performance, so shouldn’t
    we think about how we can strengthen the link?
•   Isn’t it a good idea to develop a strategic framework which links reward
    processes with HR processes so that they are more coherent and mutually
    supportive?
                          A STRUCTURE FOR
                          REWARD STRATEGY

•   a statement of intentions
•   a rationale
•   a plan
•   a definition of guiding principles.
                           REWARD GAP ANALYSIS
                  Assess against each of the following headings describing what
                should happen, what is happening now and what needs to be done

1.    A total reward approach is adopted.
2.    Reward policies and practices developed on the basis of a well-articulated reward strategy.
3.    An analytical non-discriminatory job evaluation scheme is used.
4.    Equal pay issues are given serious attention.
5.    Market rates are tracked and pay is competitive.
6.    Grade and pay structures are appropriate and constructed logically.
7.    Contingent pay schemes reward contribution fairly and operate effectively.
8.    Performance management processes contribute to performance improvement.
9.    Employee benefit schemes meet the needs of stakeholders and are cost-effective.
10.   A flexible benefits scheme is in use.
11.   Reward is managed effectively and value for money is obtained.
12.   Appropriate use is made of IT to support reward management.
13.   Reward management policies are transparent and communicated well.
14.   Surveys are used to assess employee opinion about reward.
15.   An appropriate amount of responsibility for reward is devolved to line managers.
16.   Line managers are capable of carrying out their reward management duties.
17.   Line managers are trained and provided with the support and guidance they need.
18.   HR has the knowledge and skills required to develop and manage reward.
19.   Affordability of reward initiatives and value for money are given constant attention.
20.   Reward processes are evaluated to ensure they meet changing needs.
               REWARD PHILOSOPHY DEFINED



The set of beliefs that underpin the reward strategy of the organization and govern
the reward policies that determine how reward policies operate.
  REWARD PHILOSOPHY AND PRINCIPLES AT B&Q
              Reward philosophy                                    Principles

• We will provide an innovative reward
  package that is valued by our staff and         • Innovative and differentiated policies and
  communicated brilliantly to reinforce the         benefits.
  benefits of working for B&Q plc.


                                                  • Basic salaries will be competitive.
                                                  • Total compensation will be upper quartile.
• Reward investment will be linked to company     • We share the success of B&Q with all our
  performance so that staff share in the            employees.
  success they create and, by going the extra     • Increase variable pay as a percentage of
  mile, receive above average reward                overall to drive company performance.
  compared to local competitors.                  • Pay for performance.
                                                  • Performance objectives must have line of
                                                    sight for individuals/team.

                                                  • Non-cash recognition is a powerful driver of
                                                    business performance.
• All parts of the total reward investment will   • Pay can grow without promotion.
  add value to the business and reinforce our     • Rewards are flexible around individual
  core purpose, goals and values.                   aspirations.
                                                  • We will not discriminate on anything other
                                                    than performance.
           DEVELOPING REWARD STRATEGY

                  Analyse business strategy


                    Develop HR strategy


Analyse present       Develop reward           Assess needs of
 arrangements            strategy               stakeholders


   Consult and       Guiding principles            Consult,
 involve senior                                  involve and
management and        Define, justify and       communicate
 line managers        agree intentions:        with employees
                          • total reward
                         • job evaluation
                       • grade/pay structure
                        • contribution pay
                            • flexibility
INTEGRATED REWARD IN A RETAIL COMPANY

                       ‘Make the work worth it’

                              Organization design




                           What should I be doing?
                           How should I be doing it?
                           • roles and accountabilities
                           • communications and clarification



                                     Strategy,
    What’s in it for me?                                   How am I doing?
                                    vision and
    • base pay                                             How can I grow?
    • incentive pay                   values               • learning and
    • benefits                                               development
    • flexibility                                          • performance
    • recognition                                            culture
                                                           • coaching




        Reward                                           Performance management

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:179
posted:9/5/2011
language:English
pages:14