THE ELEMENTS OF REWARD MANAGEMENT

THE ELEMENTS OF REWARD MANAGEMENT

A total rewards system comprises all the efforts that an employer can use in recruiting, motivating and keeping employees. According to the Grameen Foundation, a total rewards system includes five elements: compensation, benefits, professional development, recognition and work-life balance.

1. Compensation and Benefits: Compensation refers to the various ways an employee earns money from the company. It typically consists of a base salary or hourly wage but can also include profit sharing and bonuses. Benefits refer to both mandatory programs and employer options. Mandatory programs include worker’s compensation and Social Security, while employer options include paid vacation time and pension programs.

2. Market Rate Analysis: Market rate analysis is the process of identifying the rates of pay in the labour market for comparable jobs to inform decision on levels of pay within the organisation.

3. Professional Development and Recognition: Professional development encompasses a broad spectrum of learning and advancement opportunities, such as tuition reimbursement, mentoring and defined advancement tracks. For example, a business might cover the costs for everyone in a department to receive access to a relevant online course. Recognition ranges from an individual acknowledgement of work well done to a formal recognition program, such as an employee of the month or year program. Formal programs often include incentives, such as a plaque or prize.

4. Job Evaluation: Job evaluation is a systematic process for defining the relative worth or size of jobs within an organisation in order to establish internal relativity and provide the basis for designing an equitable grade structure, grading jobs in the structure and managing relativity. It does not determine the level of pay directly.

5. Work-Life Balance:  Work-life balance refers to providing employees a chance to meet their personal obligations or goals. For example, some employers allow employees to come in early or leave late, so they can get their kids on the bus or attend their child’s events. Employers might also establish volunteer programs, offer a childcare subsidy or provide stress-management resources.

6. Grade and Pay Structure: Jobs may be placed in graded structure according to their relative size. Pay levels in the structure are influenced by market rates. The pay structure may consist of pay ranges attached to grades, which provide scope for pay progression based on performance, competence, contribution or service.

7. Development: Lack of development opportunities is the number-one reason employees leave their jobs. Don’t let that be the reason your best talent leaves. Offer career development opportunities tailored to your employees’ goals for growth, and be sure to provide the resources they need, such as access to training and courses.

8. Culture and Reward go hand in hand:  A growing number of organizations have stopped arguing and taken a different approach. They’re changing both their companies’ cultures and rewards at the same time. Culture, in this instance, refers to the way in which people work and how they’re organized, how and by whom decisions are made, and how constructive levels of trust and respect are developed. Rewards go beyond the financial returns to include all of the things about work and working that people find rewarding, such as recognition, career development, feedback and meaningful work.