Reward Strategy: A Practical Guide

Bevan S | HR Network Paper MP11 | Institute for Employment Studies | Aug 2001

Most organisations aspire to a state where their management of pay is congruent with a wider set of business objectives.

For example, in markets where cost leadership is essential, paybill control is an important strategy; in sectors where service quality is paramount for competitiveness, the incentivisation of pay (or theuse of approaches to reward which emphasise culture change) might be a more appropriate strategy.

Pay systems require a major effort to change fundamentally.Impediments include history (which limits some choices), line managers (understanding and willingness to administer), trades unions (severely suspicious of some pay approaches), CEOs and senior managers (invariably conservative and ill-informed).

This paper describes how IES has helped employers to make changes to their reward strategies and payment systems, and highlights common 'pressure points' and solutions.