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The way forward: Aligning your rewards strategy with your overall business strategy

Frew Murdoch


Performance and rewards strategy

What came first: The chicken or the egg?

Do you align your reward management model with your overall business strategy or vice versa? The usual management model is to create wealth and then share it, as in the company first focuses on business strategy, then HR management (people management), which is then followed by business results. Only after all this is a performance and rewards strategy considered. But isn’t there another way?

Between 11 and15 November, I attended the 10th Annual HR Summit incorporating HRD Expo and was privileged enough to attend  CEO of HR Perspectives Ltd, Dr Edward Kwapong’s, talk entitled Aligning performance and reward to the wider business and HR strategy.  During his presentation, he addressed the chicken or the egg question and spoke about an alternative strategy for rewards models.

Business results may be used as a function of motivating employees

Instead of using the business results as the tool to determine profit share and rewards management strategies, companies can apply the equation illustrated below:

reward strategy flow chart

By offering a better rewards strategy, your company:

  • Gains the competitive edge over other companies in terms of attracting talent, and
  • Motivates your employees to perform better, which leads to a better overall business performance and higher business results.

The question you need to ask is if business results are a starting or ongoing concern

However, you don’t need to overhaul your rewards strategy completely to achieve better results. There are some simple changes you can make to your rewards programme that will make a world of difference in terms of employee productivity and business earnings.

The way forward

1. Start the dialogue in HR

Talent Management suggests that you start the rewards strategy conversation in the HR department, reinforcing the idea that everyone - from skills and training to payroll - is part of the same team.

2. Open the conversation to the C-suite

Divide your company’s employees into their departments and functions, and discuss what motivates and incentivises each group. Use surveys and have informal interviews with employees from each function to find out what drives them. Try and get the different groups’ opinions on the reward options available, such as company cars, training, vacation time and monetary incentives.

3. Re-evaluate your rewards programs and expenditures

Talent Management says that you need to optimise the effect on your workforce, with particular emphasis on critical workforce segments and be sure to spend your money on those programmes that can help generate the highest ROI.

After you have figured out your critical workforce groups and departments, and implemented a targeted rewards strategy, your company can track the value your people produce and check it against the ROI.


Frew Murdoch is the assistant editor of HR Pulse. She has a BA degree in communications and English and a passion for HR technology.

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