This document discusses reward management and reward systems. It covers: 1. Reward management aims to recognize employee contributions and align rewards with business goals to promote high performance. 2. A reward system includes interrelated processes like business strategy, reward strategy, performance management, and job design that ensure effective reward management. 3. Key elements of a reward system include financial rewards like base pay, contingent pay, benefits; and non-financial rewards like recognition, development opportunities, and work environment. Grade and pay structures provide the framework to implement pay policies.

1. Min Khaung ( EMPA – 8 )

2. 
Reward management is concerned with the
strategies, policies and processes required to
ensure that the value of people and the
contribution they make to achieving
organizational, departmental and team goals is
recognized and rewarded
2

3. 
Reward people according to what the organization
values, wants to pay for and for the value they
create.

Support the achievement of business goals

Promote high performance & Develop a
performance culture.

Support and develop the organization’s culture
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4. 
Define the right behaviors and outcomes

Align reward practices with employee needs

Help to attract and retain high quality people

Reward the right things to convey the right
message about what is important in terms of
behaviors and outcomes.

Motivate people and obtain their commitment
and engagement.
4

5. 
Help to attract and retain the high quality people the
organization needs.

Develop a positive employment relationship and
psychological contract.

Align reward practices with both business goals and
employee values.

Operate fairly – people feel that they are treated justly in
accordance with what is due to them because of their
value to the organization
5

6. 
Apply equitably – people are rewarded appropriately in
relation to others within the organization, relativities
between jobs are measured as objectively as possible and
equal pay is provided for work of equal value.

Function consistently – decisions on pay do not vary
arbitrarily and without due cause between different people
or at different times.

Operate transparently – people understand how reward
processes operate and how they are affected by them.
6

7. 
A reward system consists of the interrelated
processes and practices that combine to ensure
that reward management is carried out
effectively to the benefit of the organization
and the people who work there
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8. REWARD SYSTEM PROCESSES
Business strategy
Reward strategy
Total rewards
Financial rewards
Pay determination
Non-financial rewards
Performance
management
Recognition
Base pay management
Job design
Contingent pay
Opportunity to
develop
Employee benefits
Work environment
Performance

9. 
sets out what the organization intends to do in
the longer term to develop and implement
reward policies, practices and processes which
will further the achievement of its business
goals.
9

10. 
Reward policies address the following broad
issues:

the approach to total reward;

the scope for the use of contingent rewards related to
performance, competence, contribution or skill;

the role of line managers;

transparency – the publication of information on
reward structures and processes to

employees.
10

11. 
Total reward is the combination of financial and nonfinancial rewards available to employees.
11

12. 
Total remuneration is the value of all cash payments
(total earnings) and benefits received by employees.
12

13. 
The base rate is the amount of pay (the fixed
salary or wage) that constitutes the rate for the
job.

It may be varied according to the grade of the
job or, for manual workers, the level of skill
required.

Influenced by internal and external relativities.
13

14. The management of base pay uses the information
from market pricing and job evaluation to design
and operate grade and pay structures that cater for
job-based pay and allow scope for pay to progress
within the structure through person-based pay
14

15. Pay determination is the process of deciding on the
level of pay for jobs or people. Its aims, which
frequently conflict, are:
1.
To be externally competitive in order to attract,
engage and retain the people required by the
organization ( External Equity )
2.
To be internally equitable in the sense that rates of
pay correctly reflect the relativities between jobs
( Internal Equity )

16. 
Employees’ perception of external equity—which
concerns the fairness of what the company is paying
them compared with what they could earn
elsewhere—are critical in such employment
relationships.

Organizations with an external labor orientation
must assess how their compensation compares with
the compensation offered by other organizations.

17. 
Employees’ perceptions of internal equity—their beliefs
concerning the fairness of what the organization is paying
them compared with what it pays other employees.

Organizations with an internal orientation spend time and
effort comparing and analyzing pay differences among their
own employees.

Pay practices, such as how much each person makes, are
usually less secretive in these organizations than in
organizations with an external orientation.

18. 
Job evaluation is a systematic and formal
process for defining the relative worth or size
of jobs within an organization to establish
internal relativities.
It
is carried out through either an analytical or
a non-analytical scheme.

19. Market rate analysis
The process of identifying the rates of pay in the
labor market for com-parable jobs to inform decisions
on levels of pay within the organization.
Market pricing
The process of making decisions on pay structures
and individual rates of pay and obtaining information
on market rates (market rate analysis).

20. Jobs
may be placed in a graded structure according
to their relative size.
Pay
levels in the structure are influenced by market
rates.
The
pay structure may consist of pay ranges
attached to grades which provide scope for pay
progression based on performance, competence,
contribution or service.

21. Contingent
pay - Additional financial rewards may be
provided that are related to performance, competence,
contribution, skill or service in the grade.
Employee
benefits - pensions, sick pay, insurance cover,
company cars.
Performance
management
Non-financial
rewards - achievement, autonomy,
recognition, scope to use and develop skills, training, career
development opportunities and high quality leadership.

22. THE COMPONENTS OF TOTAL REWARD
Base pay
Transactional
rewards
Contingent pay
Total
remuneration
Employee benefits
Total reward
The work itself (job design)
Relational
rewards
The work experience
Recognition, achievement, growth
Non-financial
rewards

23. TOTAL REWARD MODEL (TOWERS PERRIN)
TRANSACTIONAL (TANGIBLE)
BENEFITS
PAY/REWARD
• 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
RELATIONAL (INTANGIBLE)

24. Financial rewards comprise all rewards which have a
monetary value and add up to total remuneration:


base pay
pay contingent on
performance, contribution, competency or skill

pay related to service

financial recognition schemes

benefits such as pensions, sick pay and health
insurance

25. Non-financial rewards are those that focus on the
needs people have to varying degrees for recognition,
achievement, responsibility, autonomy, influence and
personal growth

26. Grade and pay structures provide the framework for
base pay management so that an organization’s pay
policies can be implemented

27. 
Narrow-graded

Broad-graded

Broad-banded

Career family

Job family

Pay spine

28. MODEL OF A NARROW-GRADED
STRUCTURE ( MULTI GRADED STRUCTURE )
£
consists of a sequence of job
grades into which jobs of
broadly equivalent value are
placed.

29. MODEL OF A BROAD-GRADED STRUCTURE
£
Have six to nine grades rather
than the 10 or more grades
contained in multi-graded
structures

30. MODEL OF A BROAD-BANDED STRUCTURE
£
multi-graded
structures into four or
five ‘bands

31. MODEL OF A CAREER FAMILY STRUCTURE
Operation
Finance
IT
Level 1
Level 1
Level 1
Level 2
Level 2
Level 2
JE points
£
Level 3
Level 3
Level 3
Level 4
Level 4
Level 4
Level 5
Level 5
Level 5
jobs in the corresponding levels
across each of the career families
are within the same size range
Career families

32. MODEL OF A JOB FAMILY STRUCTURE
Different
job
families
are
identified
£
Finance
Operation
Job families
IT

33. A PAY SPINE
Pay
spine

34. 34