A reward strategy is the design and implementation of reward policies that are likely to support your organisation’s objectives.

A reward strategy that recognises the efforts of employees and encompasses all elements of reward like bonuses, benefits, and fair pay, is much more likely to encourage employee loyalty and motivate colleagues to produce better results. Equally, an organisation that has a comprehensive reward strategy in place is likely to attract top talent from the external market.

Your reward strategy should ultimately be driven by your organisation’s overall vision and values. A successful strategy can typically be broken down into 6 easy steps:

1. Evaluate your current reward practices and policies and identify what you currently do and don’t do
2. Envision where you’d like the organisation to be in 5 years and compare this to where you are now
3. Design a bespoke strategy based on your previous analysis that incorporates job levels, pay structure, incentive design and performance management
4. Develop a set of reward principles that are aligned with your organisation’s values and culture
5. Implement your new policy, with clear communication to managers and employees, incorporating company workshops and training sessions
6. Support is provided by us to continue to monitor your rollout and guide you through the transitional periods.

Total reward covers all aspects of work that are valued by employees, which includes the wider pay and benefits package, learning and development opportunities, flexible working allowances, etc. When taking all these elements into account an employee can understand what their total reward package is, as opposed to limiting this to base salary.

By getting the compensation benchmarking right in your organisation, you are more likely to retain your top talent and be viewed as a fair, transparent employer. Having a good understanding of where your company sits in the market is key to setting an effective reward strategy and knowing that you are rewarding your employees appropriately.

Now more than ever, employees have access to a wealth of information on market salary ranges for their roles, so it’s in an organisation’s interests to develop fair and competitive pay ranges, and ensure they are regularly updated.

A salary survey is used by an organisation when they want to carry out a salary benchmarking exercise, to establish how their pay frameworks fare against the external market. Salary surveys can be used for both current roles to help form the basis for internal pay ranges and help to budget for future salaries when planning for new hires.

When choosing a salary survey, organisations should consider the following;

1. Whether to study data that is industry specific or more general
2. If you would like to look at particular organisations to compare to, i.e., your competitors
3. How detailed the survey providers will be with their findings and how much support they will offer with validating the data

An Equal Pay Audit is the process of comparing how much you pay men and women who carry out equal work. The Equality Act 2010 states that women should be compensated the same as men when doing equivalent work, which can broadly be broken down into 3 categories:

1. Like work: similar tasks that require similar skills
2. Work rated as equivalent: graded as equivalent under a job evaluation scheme
3. Work of equal value: of equal value in terms of effort, skill, and decision-making

Conducting an Equal Pay Audit in your organisation will not only ensure you are not breaking the law in any way, but also help to create a transparent culture around pay and highlight your commitment to equality and business values to employees, partners, and clients.

The gender pay gap (GPG) is a measure of the difference between men’s and women’s average earnings across an organisation or the labour market. Gender pay gaps may exist for several reasons, the most common being the lack of representation of women in senior roles where pay, bonus and incentives are higher, and likewise an over-representation in junior or administrative roles where financial reward is low. They could also be due to the difference in years of employment due to maternity leave and the negative impact of part-time work on career progression.

Any organisation that has 250 or more employees must publish its GPG. When the number of employees fluctuates and falls just below 250, it isn’t mandatory to publish the GPG, but the organisation is encouraged to on a voluntary basis.

Pay transparency is not simply the act of disclosing the salaries of employees. It refers to being clear and open about how and why compensation decisions are made, and ultimately leads to employees having a greater understanding of what is expected of them and the overall reward principles of the organisation that drives theirs, and everyone else’s work.

Pay transparency can also be key in helping to reduce the gender pay gap, as it encourages employers to be more open about the purpose of pay and how these decisions are made.

As a specialist pay and reward consultancy with technical reward expertise gained in-house and as consultants, our team has the skills and knowledge to advise on almost all areas of pay and reward policy and process in your organisation. For a full list of how we can help you, please visit our services page for more detailed information:

https://3r-strategy.com/our-services/

At 3R Strategy we believe that an effective reward strategy can be made up of ‘Four Pillars’ that lead to ultimate fulfilment in the workplace. These are:

1. Pay
2. Benefits
3. Personal Growth
4. Positive Workplace

We’ve put together a handy infographic that shows what each of these pillars is made up of: