Prof.

Jairaj Kochavara

Definition Reward Management

Reward Management is concerned with the formulation and implementation of strategies and policies that aim to reward people fairly, equitably and consistently in accordance with their value to the organization.
It deals with the design, implementation and maintenance of reward processes and practices that are geared to the improvement of organizational, team and individual performance.

Prof. Jairaj Kochavara

The Aims of Reward Management

The strategic aim of reward management is to develop and implement the reward policies, processes and practices required to support the achievement of the organizations business goals.

The specific aims are to: create total reward processes that are based on beliefs about what the organization values and wants to achieve; reward people for the value they create; align reward practices with both business goals and employee values;
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The Aims of Reward Management (contd.)

reward the right things to convey the right message about what is important in terms of expected behaviours and outcomes. facilitate the attraction and retention of the skilled and competent people the organization needs, thus winning the war for talent; help in the process of motivating people and gaining their commitment and engagement; support the development of a performance culture; develop a positive employment relationship and psychological contract.
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Prof. Jairaj Kochavara

Total Reward and Engaged Performance

Prof. Jairaj Kochavara

Components of Total Rewards

Base Pay Contingent Pay (for performance, competence or contribution)

Recognition Responsibility
Meaningful work Autonomy Opportunity to use and develop skills Career opportunities Quality of working life Work/life balances
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Financial Rewards and Benefits

Variable Pay (cash or bonuses) Share ownership Benefits

Total Remunera tion

NonFinancial Rewards (those arising from the work itself and the work environ ment)

Total Reward

Components of Total Rewards contd.

Compensation the foundational rewards that are primarily financial in nature and satisfy financial needs for income

Benefits these satisfy protection needs and are unlikely to be performance-based.

The work experience these are the relational needs that bind workers to the organization more strongly because they satisfy an individuals needs such as personal development and fulfillment.
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Prof. Jairaj Kochavara

Benefits of Total Reward Approach

Greater impact the combined effect of transactional and relational rewards will make a deeper and longerlasting impact on the motivation and commitment of people. Enhancing the employment relationship the employment relationship created by a total rewards approach, which makes the maximum use of relational as well as transactional rewards, will appeal more to and engage individuals.
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Benefits of Total Reward Approach (contd.)

Increased engagement as part of the process involving people in their own reward package design gives them strong messages about the organization and its values. At its best, it builds relationship capital. Flexibility to meet individual needs relational rewards may bind individuals more strongly to the organization because they recognize and can answer special individual needs.

Prof. Jairaj Kochavara

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Benefits of Total Reward Approach (contd.)

Winning the war for talent relational rewards help to deliver a positive psychological contract and, as stated by Brown and Armstrong, this can serve as an effective brand and differentiator in the recruitment market which is much more difficult to replicate than individual pay practices. The organization can become an employer of choice and a great place to work, thus attracting and retaining the talented people it needs.
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