Using our heads to solve your Reward challenges.
A well-defined reward strategy is crucial for aligning employee motivation with organisational goals, supporting engagement, and enhancing overall performance. This article will explore the journey of developing a reward strategy, the elements of reward that need to be considered and included, and the importance of aligning them with an organisation's mission, values, and business goals.
Where to begin when creating a Reward Strategy
Creating an effective reward strategy begins with understanding what we mean by Reward Strategy; It is how the reward philosophy is delivered, underpinned by the reward principles - It is the plan or roadmap. A reward strategy is a subset of the broader people strategy, which itself is driven by the organisation's mission, values, behaviours, and business strategy. This alignment ensures that the reward strategy supports the overall objectives and culture of the company.
Here at Reward Heads, we always say 'start with the end goal in mind', you cannot set off on the journey not knowing whether you are starting from London or Bristol and going to Leeds or Manchester, but you have already decided to drive up the M1. You need to pause, and consider where you are aiming to go, the purpose of the journey and what method of getting there may work best.
Ultimately, organisations need to take time to review all key areas which may impact a reward strategy first, these can include;
Impact of Different Missions, Values, and Business Goals
The reward strategy should be tailored to fit the specific context of the organisation. For example, it depends on the type of business that is operating, here are some examples of how this can vary:
Developing a Reward Philosophy
A Reward Philosophy is a key component of a Reward Strategy, it is a concise statement translating the organisation's purpose, beliefs, and culture into how employees are rewarded, which overall link into the company values. For instance, Reward Heads states: "To enable everyone to realise their potential through Total Reward: our clients, their employees, and our team."
Below is an example of our EPIC company values, and the defining meaning and beliefs imbedded within them:
Connecting Mission, EVP, and Values
As you can see our Reward Head values are all interlinked to our overall vision, purpose and values. A Reward Strategy outlines how the reward philosophy is executed. It is then internally supported by reward principles such as equity, market position, impact on performance, smooth processes, and diversity and inclusion. These components need to be connected to the overall mission, EVP and values.
Developing a Reward Framework and having a plan!
A Reward Framework integrates various reward elements into a cohesive structure. It typically includes a grading or levelling structure that determines pay ranges, bonuses, and benefits. Examples of Reward elements would include:
Examples Plan for Base Pay to align to the Reward Strategy:
A well-crafted reward strategy is integral to an organisation's success, ensuring that employee efforts are aligned with organisational goals. By understanding the mission, values, and business goals, and integrating these into a comprehensive reward framework, organisations can foster a motivated and high-performing workforce.
If your organisation needs support in developing a winning Reward Strategy, Reward Heads team can support you, please reach out to Victoria Milford, our CEO, rewardsolutions@rewardheads.co.uk.
Alternatively, we do offer Reward coaching modules, which are designed to help expand Reward knowledge within your organisation, we do have coaching modules on Reward Strategy - you can find more information on those here - Coaching.
Victoria Milford - CEO