Feature topic - Adding value
Reward strategies
Jerome Smail, freelance journalist , presents the experiences and views of several industry luminaries, provides a case study, and some general rules
T he landscape of pay has changed almost immeasurably over the last half-century. What was once a reasonably simple transaction allowing for tax and National Insurance has become an increasingly complex process involving statutory considerations such as the national minimum wage, the national living wage, compulsory workplace pension contributions and a whole host of adjustments according to specific benefits packages. And, of course, benefits move beyond the realm of the pay packet. All this means the old terms of ‘pay’ and ‘remuneration’ are no longer sufficient –
hence the broader signifier of ‘reward’ now used to encompass the wider spectrum of processes and functions involved – including (perhaps most significantly) payroll. Equally, it has become incumbent on all organisations to look beyond basic pay and pensions packages for rewarding employees. An effective reward strategy is now an essential component of a successful business, regardless of its size. “Whereas it would be wrong to underestimate the importance of pay, there is a growing realisation that there are many other aspects to being employed that may be considered to be rewarding,”
explains Cliff Vidgeon, CIPP secretary and board director. “These range from benefits such as pensions, annual leave and health insurance to perceived other benefits such as career progression, work-life balance and culture.” For an employer, understanding what is rewarding is becoming hugely important and its significance is not restricted to recruitment and retention. Vidgeon adds: “Reward systems are an important tool in terms of encouraging innovation and developing and delivering organisational strategy. There is an important relationship between reward systems, employee engagement and productivity, and understanding it could be key to success in a business environment that is becoming ever more competitive and turbulent.” Employers also need to consider the workplace and how it interacts with people’s lives, according to Ian Hodson, head of reward at University of Lincoln. “In the workplace we are now very aware that what employees look for extends far beyond the hygiene factors around aspects such as pay and pensions,” he says. “The workplace is far more fluid with your life outside of work and we really need to be aiming to support those interactions and ensuring that the workplace is somewhere that individuals want to come to. This
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Issue 60 | May 2020
| Professional in Payroll, Pensions and Reward |
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