Measuring the effectiveness of pay and reward practices

How do we achieve more evidence-based reward management?

Brown D, Reilly P | HR Network Paper MP84 | Institute for Employment Studies | Mar 2009

cover image

This article profiles an IES research project on reward effectiveness and the early findings.

Despite the contemporary focus on the effectiveness of certain reward practices such as bankers’ bonuses, and despite the spread of evidence-based management techniques and balanced scorecards, it describes how very few UK organisations seem to systematically evaluate and produce robust evidence to justify their reward practices. It considers the reasons for this, including the complexity of rewards and their assessment criteria.

The article makes the case for addressing this situation, for not only are rewards a major cost, but there is research evidence to indicate that pay and reward arrangements can enhance employee engagement and thereby support improved business performance. The aim of the research project is to produce practical guidance and tools to facilitate improvements in the field.