LAWLER’S MODEL OF REWARD STRATEGY RESOURCES ENVIRONMENT CORPORATE GOALS & OBJECTIVES ORGANIZATION DESIGN & MANAGEMENT STYLE REWARD SYSTEM INDIVIDUAL & ORGANIZATIONAL BEHAVIUOR Reward system – An important means of communication
RELATIONSHIP BETWEEN HR & REWARD PRACTICES & BUSINESS PERFORMANCE JOB SATISFACTION EMPLOYEE INVOLVEMENT / COMMUNICATION BUSINESS PERFORMANCE HR PRACTICES
ALIGNING REWARD SYSTEM WITH STRATEGY BUSINESS STRATEGY PEOPLE REQUIREMENT PREVIOUS REWARD METHODS CHANGES TO REWARDS
EFFECTIVE REWARD STRATEGY EFFECTIVE REWARD STRATEGY WELL DEFINED GOALS & OBJECTIVES WELL DESIGNED PAY & REWARD PROGRAMMES ACCORDING TO THE NEEDS EFFECTIVE & SUPPORTIVE HR
BALANCED, PRACTICAL REWARD STRATEGY MODEL ORGANIZATION CAPABILITIES BUSINESS STRATEGY ORGANIZATION STRUCTURE EMPLOYMENT DEAL COMPETENCIES DEMOGRAPHICS VALUES TOTAL REWARD STRATEGY PAY BENEFITS LEARNING & DEVELOPMENT WORK ENVIRONMENT IMPOROVED BUSINESS RESULTS & ALIGNED EMPLOYEE BEHAVIOURS EMPLOYER’S PERSPECTIVE EMPLOYEE’S PERSPECTIVE
Focus on individual performance in teams
Lack of customer service rewards
Lack of relationship between pay & performance
Absence of learning and development
Pay levels and benefits entitlement strongly related to the length of service
Lack of variable portion in pay
PERFORMANCE RELATED PAY
Score card driven bonus
Customer satisfaction (customer survey)
Shareholder returns (profitability vs. targets)
Learn ‘n’ Grow
Reward Policies provide guidelines for the implementation of reward strategies and the design and management of reward process .
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
The scope for the use of contingent rewards related to performance, competence, contribution or skills.
The degree of flexibility required.
The role of line managers.
Involve employees in the design of reward systems
Communicate the reward policies to employees
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 the company
Market Rate and Equity
Policy needs to be formulated on the extent to which rewards are market driven rather than equitable.
Obtain and keep high quality staff
Response to market pressures
Market considerations will derive levels of pay in the organization.
Training and development
Intrinsic interest of the work
Flexible working arrangements
Work life balance
Capelli says “market determines the movement of employees, not the company”
Talent management (attraction and retention of quality employees)
Talent management policies
To attract employees
To develop employees
Talent Management Policies
Talent Management Process:
Employer of Choice
Designing jobs and roles
Opportunities to develop skills
Talent Management process
Work life balance
Leadership qualities of line managers
Conducting talent audits
Reward to Business Performance
Link between reward and business performance.
A commitment to employee involvement that ties additional pay to improvements in workforce performance.
A plan under which an employer pays to eligible employees, as an addition to their normal remuneration, additional sums in the form of cash or shares in the company related to the profits of the business.
The total reward policy should state that although contingent rewards play an important part in the reward policies of the organization other forms of non financial reward are regarded as being equally important
Pay for individual that is related to performance, competence, contribution or service.
How existing employees should be assimilated into revised pay structure.
Red circling (identifying and dealing with overpaid people)
Green circling (identifying and dealing with underpaid people)
Flexing Company Cars
Flexible private medical Insurance
Role of line Managers
Direct interaction with employees
Employees should be given voice in the design and management of reward processes.
Communication to Employees
Reward processes are powerful media for conveying messages to employees about the organizations values and the contribution they are expected to make in upholding those values and achieving the organization’s goals.