Reward strategies

Effective reward management can help you achieve your business objectives by attracting and retaining motivated, loyal and competent people. In return for their commitment, people expect financial rewards such as salary, fringe benefits, bonuses, promotions or stock options. They will also seek other forms of reward such as recognition of competence, achievement, responsibility, influence, and personal growth.

The challenge is to get the balance right to get the best results. You will need to establish the relationship of the rewards to business and individual performance, and make informed decisions about flexibility and fairness, the level of rewards, market rates, pay structures, incentive/bonus schemes and benefits.

The following key points will help you manage reward to improve your business results:

Ensure that all reward programmes are aligned to business objectives.
Determine the present situation - typically you will have people with a variety of packages.
View, and communicate 'total reward' packages ensuring each element is valued and has a distinct purpose.
Remuneration is a major cost for any organisation, invest where the maximum return will occur.
'One size' does not necessarily fit all. Target your spend and tailor your reward programme for the different areas of your organisation.
Ensure that the different elements of the reward package don't overlap. For example, salespeople are often paid cash bonuses and receive recognition awards. Both elements are rewarding the same behaviour, don't pay twice.
Benchmark your pay and benefits against the market - there is no need to be over generous when compared with your peer organisations.
When reward programmes are successful, they should be linking to, and supporting, other people issues.