Employee Reward

1
Employee Reward

• After engaging with ideas discussed in this text
  you should
• be familiar with the alternative
• approaches to employee reward
• recognise the role of context in relation
• to employee reward
• be able to reflect systematically on the
• consequences of choices of approach in
• context

2
Map and compass a plan of the book
3
What is employee reward?

• A reward may be anything tangible or intangible
  that an organisation provides to its employees
  either intentionally or unintentionally in
  exchange for the employees potential or actual
  work contribution, and to which individuals
  attach a positive value
• John Shields (2007)

4
The effort-and-reward bargain

• In its socio-economic relational context
• Every employment contract consists of two
  elements (1) an agreement on the reward rate
  (either per unit of time or per unit of output)
  and (2) an agreement on the work to be done.
• Hilde Behrend (1957)
• Not a recent revelation, but it may be
  overlooked in technique recipes!

5
Reward systems

• Classical labour economics models may be viewed
  as closed wage-setting systems.
• Occupational psychology may equally focus on
  stimuli internal to the individual organism.
• General systems theory (although not without
  critics) enables the analysis of effort-reward
  relationship patterns as open systems that
  interact dynamically and reciprocally with the
  environment, to understand the way different
  reward systems operate in practice.

6
Orientations towards the workforce reward
management implications
7
Employee reward management contexts

• Managers should try to define given the
  current limitations of the environment, and the
  chances of altering them to make elbow room
  what the best course of action might be.
• (Lupton and Gowler, 1969 emphasis in original)
• Context factors some examples (in no particular
  order)
• industry sector, age and scale of enterprise,
  state of economic conditions, legislation (eg
  national minimum wage, disclosure requirements on
  executive remuneration), extent of globalisation,
  presence or absence of trade unions, skills
  shortages/tightness of labour market(s)/talent
  war pressures, technological profile,
  geographical setting, local/transnationally
  mobile workforce, corporate governance
  priorities, rate of product/service change,
  duration of value-creation cycles, annual
  employee voluntary turnover, workforce
  demographics, ownership/finance capital
  investment profile, carbon footprint, management
  style and values, organisational culture,
  mergers and acquisitions planned/pending, joint
  ventures/partnerships
• you fill in the gaps (class exercise)

8
Summary

• Reward defined extrinsic and intrinsic
• An effort bargain relationship-based
• Systems thinking interacting factors
• Employer-employee orientations
• Corporate, national and international contexts
  for thinking and acting on employee reward
• Complementing the Employee Reward text, for an
  overview of employee reward follow the Internet
  hyperlink http//www.cipd.co.uk/subjects/pay/gener
  al/payrewrdovw.htm for a CIPD factsheet.
• NB All citations in these slides can be traced
  to the list of references in the Employee Reward
  text.