For our first post in the ‘reward for non-reward professionals’ series we’ll be looking at the fundamental concept of reward – what does it mean to employees and what should it mean for employers? As the series progresses we’ll focus in greater detail on different forms of reward, what they are and how they can be used effectively. For now, let’s start as all good stories do, at the beginning…
Developing an effective Reward Strategy
Ask any employee in any industry what the word ‘reward’ means to them and there’s a good chance the first thing that comes to mind will be money. However, we believe it’s crucial for any organisation to understand first and foremost that the concept of ‘reward’ can mean so much more than just remuneration. We’re going to take a look at how an effective Reward Strategy can benefit both the employee and employer whilst helping achieve organisational goals and shape day-to-day decisions. Sound too good to be true? Bear with us….
Like any word, ‘reward’ means many things to many people. At Mastertek, ‘Reward’ is a concept. Yes, it can be financially driven in the form of: salaries, bonuses or benefits but for an organisation to have an effective Reward Strategy they must look at the notion of reward in its most holistic sense.
Organisations must understand that elements of reward that aren’t as tangible or financially driven can be equally as effective when it comes to employee motivation, commitment and performance. ‘Reward’ is something much more powerful than money, so elements such as: (genuine, authentic) recognition, (real) work-life balance, (meaningful) learning and development opportunities can be called upon to motivate and ultimately help ensure people feel rewarded in the work place.
If designed and delivered proficiently, a holistic Reward Strategy can be efficient and effective as well as aligning perfectly with the organisation’s overarching strategy.
So, with that in mind, what do you need to consider when designing an effective Reward Strategy?
Objectives of your Reward Strategy can be summarised by the following graphic:
This may seem obvious, right? But our experience has shown that if you don’t take the time in the planning phases of developing your Reward Strategy to consider what the purpose of your reward programs is, there’s a higher likelihood of failure (be it that programs are considered ineffective or, worse, have a quite unintended, negative impact on your people or performance).
When developing the Reward Strategy, take time to ask the obvious questions. The key is communication, so the importance of discussing potential reward strategies and their desired impact is crucial to success. It is vital that you understand what each of your employees’ really value (besides cash) and accept that this will differ from employee to employee.
Once we determine what’s important, how do we reward?
Let’s take a moment to embrace the idea that non-financial reward strategies can have an impact sometimes more powerful than, traditional financial reward offerings when it comes to evoking a positive response from your employees.
If you can understand the many ways that people might actually want to be ‘rewarded’, it will be much more likely that your organisation can maximise the return on your reward-related investment by delivering something of greater value to the individual than the cash value invested.
In its simplest sense, once an organisation understands that there are multiple ways to recognise and reward employees, there’s a higher chance that your Reward Strategy will pay maximum dividends for both the individual and the organisation.
Your Reward Strategy should be considered as the link between the business objectives and the people who are asked to achieve that objective. The right Reward Strategy, should focus attention on what the organisation values in order to trigger the desired behaviour and ultimately achieve a positive impact for all parties. Win/win right?
When determining what your Reward Strategy looks like, don’t forget to take a step back and look at the bigger picture. The Reward Strategy should always be planned to align with your organisational strategy and the reason for the organisation to exist in the first place – your purpose.
There’s no ‘one size fits all’ approach to reward. If designed well, like organisational values, your Reward Strategies can shape the way people interact and guide day-to-day decision making.
Finally, food for thought…
Week-by-week we will continue to step through Mastertek’s ‘A Guide to Reward Strategy’ and discuss how the key elements can be implemented in ANY organisation.
Mastertek is a specialist consulting practice providing reward and HR related support and advice, you can find out more about Mastertek’s services head to: https://www.mastertek.com.au/