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“is how people are rewarded in accordance with their value to the organisation. It is concerned with both financial and non-financial rewards and embraces the philosophies, strategies and policies, plans and processes used by organisations to develop and maintain reward systems”. (Armstrong, 2000:3)
Describes the whole range of elements which combine to make work ‘rewarding’ and worthwhile.
Central to the employment relationship.
Importance to the organisation?
Importance to the individual?
Quite recently UK organisations have begun to develop identifiable ‘reward strategies’
Prior to that, industrial relations system restricted freedom of managers
Collective bargaining via trade unions determined mostly pay and other issues
Has declined sharply and organisations are increasingly introducing payment systems that are at the level of the individual
Experimentation and a variety of practice
New Pay & Old Pay
Term New pay originated in US.
Opposite of ‘old pay’ concept of bureaucratic salary admin, org. hierarchy, rigid job evaluation, & grading systems, incremental progression, no link to org strategy, lack of integration with other HR practices.
Primary concerns of old pay are: fairness, equity & transparency.
‘Old pay’ thought to inhibit organisational responsiveness & development in more turbulent environment.
‘New pay’ is about ‘sending the right message’ about performance & corporate values to employees. Emphasis on rewarding contribution rather than seniority or status.
Incorporates several reward themes. …
- Competitiveness of J/S Company "Kometa” in the World Market
- Customer Migration
- Reward Management
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