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Reward Policy Overview

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:

• remuneration for employee's efforts, time and results;
• performance recognition and improvement;
• motivation and engagement.

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:

• Organisational Strategy
• HR Strategy
• Developing a Total Reward Philosophy
• Total Reward Strategy
• History of Reward in your Organisation
• Current Reward Offering

The flow of this process is illustrated in the following diagram:

Total Reward Strategy Development Map

                                                                                 © Hay Group

When reviewing the Organisation Strategy, HR Strategy and other aspects of reward, it is important to balance employee needs against organisational needs, and to ensure that they all work together to achieve overall business performance. The pages within this section will take you through the process of assessing all these policies.

It is important to bear in mind that in the public sector, the unique and sometimes complex governance arrangements make the communication and consultation aspects of this model particularly important. Before any action is taken, thinking through which stakeholders must be consulted, or have a decision-making role to play will be essential. These could include central government departments, elected members, staff groups, Trades Unions, other public service or private sector partners, and being clear about how the mission for the organisation, and resulting success, is defined will also be crucial.