Our definition of Reward Strategy is:
“An approach to reward based on a set of coherent principles in support of the organisation’s aims.”
Many organisations may have a reward programme but little strategy behind it, or understanding of its implications or the perception of it held by employees.
An effective reward programme is, therefore, one which is underpinned by a reward strategy.
To paraphrase what the Cheshire cat said to Alice, ‘If you don’t know where you are going, it doesn’t matter which way you go.’ With this in mind, any reward strategy must be based on an understanding of where you are trying to get to; at least the direction. But, how can you do this effectively?
Define the terms to be used in your reward programme
This is obvious, but also important: Reward, Total Reward, Values, Behaviours, etc. There is a lot of terminology used. However, what do they mean in your organisation? Be clear and have clear definitions.
It is too easy to use the rather anodyne phrase, ‘to recruit, retain and motivate’ to explain your reward programme. But they do not all do all of these things, so consider which elements do what.
Consider your reward components
Answer the following for each of your reward components:
- What are they each for?
- How do they relate to each other?
- What are they meant to do?
- What messages do they carry?
Understand the implications of your current reward programme
If you have a reward programme in place, you will also want to reflect on what it is doing for you, ask yourself:
- Does our reward programme fit with our business strategy and other HR strategies?
- How cost effective is our reward programme?
- What is the perceived value of a reward programme in the eyes of employees?
Refine your reward programme using a reward strategy
Once you have all the answers about your current reward programmes and identified any misalignment, you can develop a reward strategy that aligns with your organisation’s goals and culture.
If you would like support with redesigning your organisation’s reward strategy, get in touch today.