Professional Documents
Culture Documents
CH 4
CH 4
Strategic Rewards
Strategic Reward Management is the process of planning the future development
of reward practices through the development and implementation of reward
strategies that are based on a reward philosophy and incorporate the concept of
total rewards.
to get there.
A strategic reward framework enables reward processes to be aligned
and performance.
Pay costs in most organizations are by far the largest item of expense
They are the basis for reward policies and provide guidelines for
the actions contained in the reward strategy.
All reward strategies are different just as all organizations are different.
The reality of reward strategy is that it is not such a clear-cut process as
some believe. It evolves, it changes and it has sometimes to be reactive
rather than proactive.
Reward strategy often has to be a balancing act because of potentially
conflicting goals.
An overall reward strategy may cover all aspects of rewards – valuing
roles, the design of grade and pay structures, contingent pay, non-
financial recognition, and pensions and benefits, including flexible
benefits. Alternatively, the strategy may be concerned only with
implementing total rewards.
Overall strategy
An overall strategy covers all aspects of rewards-
valuing roles, the design of grades and pay
structures, contingent pay, non-financial
recognition and pension and benefits including
flexible benefits.
The aim would be to develop a substantially
revised reward system.
Specific reward strategies
Specific reward strategies are more closely focused on one issue such as
introducing contribution-related pay, or two or three linked issues that
can be dealt with in a single programme, often over a limited timescale
to respond to pressing needs.
Such issues includes:
Placing reward in a program for developing a high- performance work system.
Introducing revised job evaluation schemes.
Conducting program for equal pay.
Developing new pay structures and new grades.
Introducing revised contingent pay schemes.
Replacing traditional performance appraisal to performance management
process.
Introducing flexible benefits.
The structure of reward strategies
BUSINESS STRATEGY
HR STRATEGY
Business strategy
• To be the indisputable leader in the pharmaceutical industry
• Portfolio – build the best pipeline (the time it takes to bring a
drug to market).
• Product commercialization – developing products from a
‘molecule’ into a blockbuster drug.
• Global competitor – having a global mindset where
appropriate.
• Operational excellence – to be the best-managed
organization. Processes should be slick, smooth and efficient.
Business strategy
• Enhance the brand – drive sales through stronger
alignment of merchandizing, creative and marketing.
• Put the customer first.
• Execute focused strategies – source better quality products
for the best value.
• Be a great place to work.
• Entrepreneurial growth through new business development.