Reward Management Assignment 2022

Reward Management
Rewarding people involves reward management processes concerned with the
design, implementation and maintenance of reward systems that are geared to the
improvement of organizational, team and individual performance. It includes both
financial and non financial rewards. Reward management is treated as very much
part of an HRM approach to managing people. The essential features of this
approach are that it:
• supports the achievement of the business strategy;
• is integrated with other HRM strategies, especially those concerning human
resource development;
• is based on a well-articulated philosophy – a set of beliefs and assumptions that
are consistent with the HRM philosophies of the business and underpin the ways in
which it proposes to reward its employees;
• adopts a ‘total reward’ perspective that recognizes that there are many other and
possibly more powerful ways of rewarding people besides financial rewards;
• appreciates that if HRM is about investing in human capital, from which a
reasonable return is required, then it is proper to reward people differentially
according to their contribution (that is the return on investment they generate);
• focuses on the development of the skills and competencies of employees in order
to increase the resource-based capability of the firm (pay for competency or skill);
• is itself an integrated process that can operate flexibly;
• supports other key HRM initiatives in the fields of resourcing, employee
development and employee relations.
The aims of reward management
The three most important aims of reward management are to:
1. Reward people according to what the organization values and wants to pay for.
2. Reward people for the value they create.
3. Reward the right things to convey the right message about what is important in
terms of behaviours and outcomes.
The philosophy of reward management
A belief in the need to achieve fairness, equity, consistency and transparency in
operating the reward system.
Total reward
Each aspect of reward, namely base pay, contingent pay, employee benefits and non-
financial rewards, which include intrinsic rewards from the work itself, are linked
together and treated as an integrated and coherent whole.
Broad-brush reward strategies
To achieve an appropriate balance between financial and non-financial rewards,
develop commitment and engagement and provide more opportunities for the
contribution of people to be valued and recognized.

Guiding principles for reward
Reward philosophies are often articulated as guiding principles
Three key guiding principles are:
1. Develop reward policies and practices which support the achievement of business
goals.
2. Provide rewards which attract, retain and motivate staff and help to develop a
high performance culture.
3. Maintain competitive rates of pay.
Reward strategy is a declaration of intent which defines what the organization wants
to do in the longer term to develop and implement reward policies, practices and
processes which will further the achievement of its business goals and meet the
needs of its stakeholders. It provides a sense of purpose and direction and a
framework for developing reward policies, practices and process. It is based on an
understanding of the needs of the organization and its employees and how they can
best be satisfied. It is also concerned with developing the values of the organization
on how people should be rewarded and formulating guiding principles which will
ensure that these values are enacted. Reward strategy is underpinned by a reward
philosophy which expresses what the organization believes should be the basis upon
which people are valued and rewarded.
Developing reward strategies
The formulation of reward strategy can be described as a process for developing and
defining a sense of direction. The main phases are: diagnosis, detailed design, final
testing and preparation, and implementation.
Components of an effective reward strategy
According to Brown (2001) an effective strategy is one in which there are clearly
defined goals and a well-defined link to business objectives; well-designed pay and
reward programmes, tailored to the needs of the organization and its people, and
consistent and integrated with one another; and effective and supportive HR and
reward processes in place.
Implementing reward strategy
The aim of implementation is to make the reward strategy an operating reality by
building the capacity of the organization to put into practice the proposals worked
out in the development stage.

Developing line management capability
HR and reward specialists need to develop line management capability by initiating
processes which can readily be implemented by line managers, promoting
understanding by communicating what is happening, why it is happening and how
it will affect everyone, providing guidance and help where required and providing
formal training as necessary.
Questions
Job evaluation
Job evaluation is a systematic process for defining the relative worth or size of jobs
within an organization in order to establish internal relativities.
The aims of job evaluation
• Establish the relative value or size of jobs.
• Produce the information required to design grade and pay structures.
• Provide as objective as possible a basis for grading jobs.
• Enable sound market comparisons with jobs or roles of equivalent complexity and
size.
• Be transparent – the basis upon which grades are defined and jobs graded should
be clear.
• Ensure that the organization meets equal pay for work of equal value obligations.
Approaches to job evaluation
Informal approaches price jobs either on the basis of assumptions about internal and
external relativities or simply by reference to the ‘going’ or market rates. Formal
approaches use standardized methods to evaluate jobs, which can be analytical or
non-analytical. Such schemes deal with internal relativities and the associated
process of establishing and defining job grades or levels in an organization.
Analytical job evaluation schemes
Analytical job evaluation is based on a process of breaking down whole jobs into a
number of defined elements or factors such as responsibility, decisions and the
knowledge and skill required. These are assumed to be present in all the jobs to be
evaluated. In point-factor and fully analytical matching schemes, jobs are then
compared factor by factor either with a graduated scale of points attached to a set of
factors or with grade or role profiles analysed under the same factor headings.
Non-analytical job evaluation schemes
Non-analytical job evaluation schemes enable whole jobs to be compared in order to
place them in a grade or a rank order. They are not analysed by reference to their
elements or factors.
Market pricing