Designing and Refining Reward Systems
Akenham helps organisations create and refine reward systems that meet the needs of the business and the key stakeholders involved. By providing an appropriate level of Analysis and helping with Decision Making, our clients can feel confident that they have tackled a very difficult subject with insight and sound judgement.
Typically there are three main lines of enquiry that we follow:
- What are the current reward principles, structures, policies and practices and how are they aligned with and supportive of the Business strategy? For example, does the reward system support high performance working? Are there any issues at present, for example high staff turnover or difficulty in recruiting talent, which may have a reward component as part of the solution? Are there any obvious pay disparities that should be addressed? Are there any concerns about equal pay?
- Is the organisations reward system competitiveness within its relevant labour market(s)? Bench-marking base pay and total cash allows an organisation to determine its overall/ aggregate market position and address whether the organisation is getting best value from its pay bill
- What is the perception of the workforce? Do they consider they are paid competitively relative to the market or fairly for their contribution to the business? How involved should they be in the process of reward renewal as opposed to being passive recipients of the outcome of a management review? Do employees appreciate the value of their reward packages? Can the organisation communicate their worth more effectively?
During the analysis there are a number of questions that will need to be asked:
- Is the mix between fixed and variable pay appropriate? Are bonus plans operating in the way intended? Do they provide participants with the incentive to raise their game and deliver superior results?
- Are benefits competitive? Is there an appropriate balance between base pay and benefits? What are employee's perceptions of benefits?
- Are benefits tailored to the needs of individuals or are they fixed? Do benefits need to be made fully flexible or can there be just a few trade-offs?
- Are benefits provided as tax-effectively as possible?
- Is reward considered holistically? Many organisations have adopted a total reward model which features the working environment, leadership and culture, learning and development, and work-life balance.
After a process of analysis and the involvement of the relevant stakeholders it should be possible to identify the gaps between the organisation’s current and future reward offering and to develop a suitable reward change agenda. The agenda would consider:
- What are the priority areas and what changes are we happy to make in the short, medium and long term?
- Is there sufficient budget to invest to make changes within a short time scale or is it a question of establishing a direction of travel and making progress towards implementation over a longer period?
- How will our decisions be implemented and communicated?
Our Reward services are headed by Rob Young. To see his profile please click here
To Get in touch, please click here