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Reward is an important part of management and the management of people. It defines what an organisation is prepared to pay for to achieve strategic goals. A review of rewards therefore logically starts with building an understanding of organisational strategy and, wherever possible, the HR strategy that supports this.
Strategic reward objectives should be aligned with business objectives in the same way as other key business areas such as finance, operations, technology and IT.
Reward can be described as the reason 'why people come to work' and consists of three key related aspects:
The three need to be considered together to ensure that the different aspects of reward are moving in the same direction. Reward practices in an organisation are most effective when they are designed to contribute in an integrated way to the achievement of the business objectives through greater employee engagement, and their development must continuously bear this in mind.
Therefore, the first priority is to examine and understand what is available on:
The flow of this process is illustrated in the following diagram:
