Posted by Sarah Lardner on 01 April 2014
Deal or no deal?
HR Reward | Reward Consultancy | Bonus | Reward Intelligence | Total Reward | Pay framework |
Do you know what you're offering your employees and why? You may think it’s obvious, but each element of your reward package is doing something different for you. I thought it was worth sharing the 'pillars of reward' approach we have at Innecto. You'll find it a great way of breaking down the employee deal and thinking about how you're using each element. Understanding is the first step. The next is to make sure you’re getting each one working hard for your business.
Reward strategy and principlesThese are set by the leadership of the business and define your overall approach to pay. Is individual or team performance more important? Is performance related pay right for your organisation? Getting these right mean that other reward decisions are more straightforward.
Fixed payThis is the base pay that you give your employee. This reflects the role, experience and skills that an individual has. How much you pay here needs to reflect how well you want to pay against the market. Where does your pay sit in the market – average, top-end?
Variable payThis is the additional cash or shares that you give an employee - not normally guaranteed eg annual bonus, long-term bonus (LTIP) or sales commission. Variable pay is usually paid to reward behaviour, extra effort or great performance. What is yours doing for you?
Benefits & environmentThese are the softer benefits and perks that an employee receives when working for your company eg pensions, company car, flexible working and educational opportunities. These reflect the type of employee you want to attract and your culture. Does your culture reflect the type of employee you need?
Recognition These are the nice little surprises you give your employees when they’ve done something well – it could be a thank you email or a sales voucher or flowers. Recognition is highly valued, particularly by the younger generation. Are you using recognition as part of your strategy?
Performance This is how you manage your employees’ performance and base your reward decisions. You define what is important to your business and then what is good or poor performance. Is your performance management relevant to your business?
EngagementThis is how you communicate and involve your employees in your business. An employee that is an advocate and is actively working in the interests of your business is a real asset. How powerful would it be to have all your employees engaged?
Get each element of your reward right and you reduce cost wastage and really get your reward working for you. Please get in touch if you’d like some help understanding or designing a new employee deal for your organisation.
