Team Members:

Soumaya Hamdouni Noura Bouibinid Mariam Morchid Ahmed Wassim Aymane Moussaid Mohamed Mahraoui

Reward strategy clarifies what an organisation wants to do in the longer term to develop and implement reward policies, practices and processes that will further the achievement of its business goals. It is a declaration of intent, which establishes priorities for developing and acting on reward plans that can be aligned to business and HR strategies and to the needs of people in the organisation.
Armstrong & Murlis. Reward Management .5th edition

Employer Objectives

Employee objectives

Attraction and Retention Motivation of Performance Driving change (Skills and Knowledge) Culture Reinforce and Define Structure Corporate reputation Affordability and Cost

The reward package should be attractive to ensure that is able to secure the services of the staff it needs, and also to retain effective performers within the organisation. The objective should be to design a reward system that is very effective at retaining the most valuable employees.

When certain specifiable conditions exist, reward systems have been demonstrated to motivate performance. Vroom, 1964; Lawler, 1973 developed an approach that help us understand how people develop and act on their mental maps. It believes that an individual's motivation to behave in a certain way is greatest when: 1. The individual believes that the behavior will lead to certain outcomes (performance- outcome expectancy). 2. The individual feels that these outcomes are attractive. 3. The individual believes that performance at a desired level is possible (effort-performance expectancy).

A good reward strategy help to motivate learning and development as Individuals are motivated to learn those changes which are rewarded. a relatively new approach to pay, skill based pay, has been developed. It allows organizations to strategically target the learning it wants employees to engage in.

 Reward

systems are one feature of organizations that contribute to their overall culture. Depending upon how reward systems are developed, administered, and managed, they can cause the culture of an organization to vary quite widely.

 The

reward system of an organization can reinforce and define the organization's structure (Lawler, 1990)

 Reward can help the organisation to maintain

a good reputation in regards to its competitors and establish a positive corporate reputation.

From an HR perspective, managers take into consideration the affordability and cost of the reward which can limit what can be done at any time. when considering affordability it is essential to consider reward as much as an investment rather than a cost to the business. However , it is important in strategically designing the reward system to focus on how high costs should be and how they will vary as a function of the organization's ability to pay.

Purchasing power Fairness Rights Recognition composition

The level of earnings determine the standard living of the employee, therefore it is one of the important considerations for most employees.

Employees tend to evaluate the level of reward that was fair for the job. The evaluation is usually based on personalised and subjective which may lead to a feeling of inequity because the better performers are likely to feel inequitably treated when they are rewarded at the same level as poor performers in the same organization.

 The

employee here is thinking about whether the division of earnings is providing fair shares. The focus is often on the notion of need. can be used by the trade unions as part of the general preoccupation with the rights of individuals.

More arguments

 Most

people have an objective for their rewards arrangements that their personal contribution is recognised. serves not only to reassure people but also it is a way in which people can mould their behaviour and their career thinking to produce progress and satisfaction.

It

In this part, the concern is more on How the pay package is made up?
Employees

tend to have different priorities, some may prefer cash and financial rewards, others are likely to be interested in indirect form of payments such as pension arrangements, however for others flexible working arrangements would be more interesting.

 The

Chartered Institute of Personnel and Development (hereafter CIPD) have identified that successful reward strategies have the following consistent themes: People centred Holistic

Best fit
Integrative

Customised
Distinctive

Strategic

Evolutionary

Implementing Reward Strategy

Part # 2

Announce the Reward Announce the Team Goal Set a Benchmark Celebrate Start Over

Set a reward, such as a bonus, that will go to each member if the team achieves its goals. This will help each team member feel valuable and can encourage those who are not leaders to make contributions for the good of the team. Team rewards tend to be cost effective because you get better performance without raising salaries permanently.

Set a goal, with the team's input, that will benefit the company. Examples are increased sales, reduced inventory shrinkage and fewer customer returns. Leave it to team members to decide how they will reach the goal. This is one of the benefits of forming teams; you don't have to come up with all of the ideas. Retain the right to give final approval to the methods and goals, to ensure that the project is something you consider to be of value for the company.

Establish benchmarks. Write down measures that will mean the team has successfully achieved what it set out to do. This can be a percentage, a target sales figure or a dollar amount the company will save. Make it clear that these are exact figures and that bonuses depend on meeting the benchmarks.

If the team reaches its goal, hold a ceremony or party at which you can distribute bonuses. You also can award a trophy to each member bearing each individual's name. This creates an atmosphere in which achievement is recognized and rewarded. You can use this approach whenever you identify areas of the company that need improvement.

Announce a new reward for a group project, and you may find enthusiastic volunteers. The previous team's success can encourage employees to work together to reach goals and receive reward.

A successfully implemented total rewards system helps organizations build a powerful benefit structure. This benefit structure will not only motivate the workforce but also regenerate a balance between corporate dollars spent and employee appreciation and engagement.

The chance of success depends on inputs from all parties that will be impacted by the program. All stakeholders need a place at the table.

every program, plans, benefits, and perks, including those that are not in use but may be considered in the future.

a. Start with surveys & benchmarking - Use industry benchmark surveys and internal employee surveys to assess how effective each program is. Effectiveness should be measured in different ways. For example, low participation rate could mean low interest; however, it could also mean low understanding of a particular program. b. Review each policies and link to business strategies This is one of the most critical steps. This is where the policies are mapped to each business strategy. For example, is the purpose of your policy to motivate a sales force, to increase customer satisfaction, or to retain personnel in a nonprofit organization? c. Conduct impact analysis Before implementing each program, ask this question: whats the financial, organizational, employee, customer impact of the plans? What if the company profit drops by 30%? What if revenue doubles? Look at both issues today and into the future.

set a timeline to phase in the programs. It is important to give managers enough time to absorb the initiatives and build new performance measures before the roll-out. Where multiple divisions or facilities are involved, a pilot plan can be used.

a plan that is not communicated is no better than no plan at all. Proper communication is the ultimate key to the success of a total rewards system. A communication strategy needs the right amount of information, being delivered at the right time and through the right media. Effective communication does not need to be expensive. Well-written, creative communication material combined with faceto-face discussions can sometimes be more effective than four-color, glossy booklets or sophisticated videos.

We can divide rewards into two main sections, which are more closely described as follows :
Extrinsic rewards
Intrinsic rewards

Concrete rewards that employee receive. Is something that is done to or for people to motivate them. It arises from factors outside an individual such as :

In challenging economic times, financial rewards can be particularly motivating. You can set up a bonus program that rewards employees for meeting certain goals within a given period. For example, if sales goals are exceeded in a six-month period, you could award your sales manager and representatives a certain percentage of the goal amount at the end of the six months. You can also provide cash awards for employees who contribute cost-saving ideas to the company or who refer quality candidates who are hired by the company. Salary increases are also an effective reward for a job done well and serve as a motivation to remain with the company.

Overworked or stressed employees will be motivated by rewards of additional paid time off. Bonus vacation days enable your employees to re-energize, and the reward is less costly for your business than other financial incentives. Offer the reward of additional paid time off to employees who demonstrate consistent, quality attendance. For example, an employee who has not been late for work for six months could be rewarded with an extra eight hours of paid time off to be taken within the following six months.

This is similar to that of overtime. However, it is paid to employees if they put in an extra hour of work for working at unsocial hours or for working long hours on top of overtime hours.

Such as free tickets, free holidays, equipments.

Will be paid to employees, who meet their targets and objectives. This is aimed at employees to improve their performance and to work harder.

This is typically paid to employees, who have met or exceeded their targets and objectives. This method of reward can be measured at either team or department level.

Profits related pay is associated with if an organization is incurring a profit situation. If the organization is getting more than the expected profits, then employees receive an additional amount of money that has been defined as a variable component of the salary.

This is very similar to that of profit related pay. This reward is based on the number of sales and total revenue generated by the organization. Piece rate reward is directly related to output. The employees get paid on the number of 'pieces' that they have produced. These pieces will be closely inspected to make sure that quality standards are being met.

Is a policy that signifies management's commitment to recognize and reward excellent performance. Itmotivates employees to aspire for advancement opportunities within the organization. It also contributes to employee satisfaction and retention.

Refers to motivation that comes from unside an individual. The motivation is generated trough satisfaction or pleasure that one gets in completing or even working on a task. Factors that influence on intrinsic motivation include responsability, freedom to act, scope to use and develop skills and abilities, intersting work and opportunities for advancement.

Will not always be motivated by monetary value alone. They do require recognition to be motivated and to perform well in their work.

This is a common type of rewards that is aimed at employees to get motivated. Job enrichment allows more challenging tasks to be included in the day-to-day tasks performed by the employee.

Unlike job enrichment, job rotation refers to shifting employees between different functions. This will give them more experience and a sense of achievement.

Refers to when employees are given authority to make certain decisions. This decision making authority is restricted only to the day-to-day tasks.

Many organizations place a greater emphasis on training. This is considered as recognition for employees. Training could vary from on the job training to personal development training.

Is an important type of recognition that is given to employees, who perform better. Organizations have introduced award system such as best performer of the month, etc., and all these will lead employees to perform better.

The aim of employee reward policies and practices is to help attract, retain, and motivate high-quality people. Getting it wrong can have a significant negative effect on the motivation, commitment and morale of employees.
And the policy rely on very important components/elements to reinforce the specific actions, efforts, behaviour and results that you are looking for in your organization.

Pay

Quality of work

Consolidated (no deduction) Non Consolidated

Benefits

Pensions Holidays Perks

Perception of the value of work Challenge/interest Opportunities for achievement Freedom and autonomy Workload Quality of work relationship

Individual growth

Organisational culture

Training On the job learning/coaching Performance management Career development Succession planning Employee involvement Coaching Learning and development

Organisational values and behaviours Quality of leadership Risk sharing Recognition Communication Organisational style Involvement Vision and values Organisational success

Positive work environment

People focus Job content Autonomy ( people want

Non financial recognition

control over their life and work) Reputation of organisation Open communications Trust and commitment Safety/personal security Information and processes Time off for voluntary contribution Involvement Colleagues

Vouchers Fairness of reward Celebration Acknowledgement Appreciation

Work-life balance
Recognition of life cycle

needs/flexibility Security of income Supportive environment Convenience services Social support, e.g. childcare

Support and be derived from the business strategy. Drive sustainable improvements in the business performance. Bring about and re-enforce cultural and behavioural change. Integrate with the rest of HR policy and practice. Keep the paybill under control. Enable the recruitment of staff of the required calibre. Demonstrate a relationship between pay and performance. Motivate employees. Be communicated well and understood by staff. Be managed effectively by line managers. Be efficient and uncomplicated to operate and maintain.

Part # 3

Reward Strategy Administration and evaluation

Salary and wage administration is the process of compensating an organization's employees in accordance with accepted policy and procedures. An important component of a successful organization's policy for administering salaries and wages is monitoring and evaluating all employees' compensation to ensure that they're being paid appropriately, both with respect to others in the same organization and to the marketplace as a whole. This process is often an integral function of the organization's human resources department, but in general, the larger the organization, the more likely is that it will be handled by a separate department.

wage and salary surveys & job evaluation: are designed to

determine the general pay level in the community and industry, thus giving a company a base for setting its own rates.

Periodic payroll :

the process where all financial records of salaries for an employee, wages, bonuses and deductions are gathered.

monitoring and evaluating employees' compensation: Is an

ongoing function which includes evaluating the elements of each job in the organization and classifying it according to a number of different criteria merit rating, and incentives : a payment system in which the personal qualities of an employee are rated according to organizational requirements, and a pay increase or bonus is made against the results of this rating.

There are many factors that the management has to take into account when they determine the overall wage salary level:

Factors Affect the overall Wgae and Salary Level

Related to recruitment and selection policy:

for high wages attract more job applicants and permit management to choose employees from a wider reservoir of talents.

Employment conditions: - When there is a great deal of unemployment, a well organized non unionized establishment may be able to hire all the men it needs at little wage. - However, when the labour market is tight, an employer may have to pay more than the going rate if he is to recruit qualified new employees.

Factors Affect the overall Wgae and Salary Level

Show good reputation:

If an organization is anxious to gain a reputation in the community as a good employer and a good citizen as are many public utilities, it may decide to pay high wages to ensure good public relations.

Unions :

Unionized organizations may be forced to pay high wages as a result of union pressure. Non-unionized organizations may pay equally high wages to keep the union out. Institutions profitability/ budget: firms determine their wage policy according to their profitability/ budget; the organization that is losing money cannot afford to pay more than the minimum. Yet, the company that is known to be profitable is expected by the community and its employees to pay liberally.

Factors Affect the overall Wgae and Salary Level

Technological development:
With the rapid growth of industries, there is a shortage of skilled resources. The technological developments have been affecting skills levels at faster rates. Thus, the wage rates of skilled employees constantly change and an organization has to keep its level up-to the mark to suit the market needs.

Wage policies may be influenced by other factors that may change the existing wage/ salary level such as: collective bargaining changes in living costs benchmark
Once the over-all wage level has been set, the company can turn to a consideration of individual rates. Here job evaluation is widely used.

Other factors:

In Al Akhawayn University, salary administration has different steps: Calculations Allowances Deductions Raises & bonuses Time and Form of Payment

There are different techniques to evaluate reward strategy. Conducted in mid-2009, the e-reward survey, undertaken in partnership with the Institute for Employment Studies, produced up-todate and revealing information from senior HR and reward practitioners in 173 UK-based organizations employing around two million people.

There are three stand out measures that an organization uses to assess the reward strategy.
Employee attitudes, mentioned by 75 per cent of those

attempting to evaluate reward effectiveness, analysis of pay market positioning (72 per cent) staff turnover rates (62 per cent).

Less than 30 per cent for other prominent measures:

length of service, absenteeism rates, vacancy rates, job refusal rates and other business metrics.

Five ways to measure employees attitudes and avoid being misled by employee masks:
Pre-hire assessments to identify behavioral

issues Internal employee attitude surveys 360-degree feedback for managers and executives Building informal networks Coaching employees builds stronger bonds

Market pay is a wage and salary rate paid for a specific job that is determined by analysis of the competitive job market and an alignment of internal equity. To determine the prevailing rate for a job, companies can "benchmark" jobs against e.i. compensation surveys that are detailed and specific to the companies' industries and regions. Such as:
National Compensation Association of State Governments

(NCASG) Survey Wyoming Wage Survey

Turnover rate is a calculation of the number of employees who have left the company. The calculation can include voluntary turnover, involuntary turnover, and total turnover.

1. Clear reward goals and priorities derived from the business-strategy and its requirements, often referred to as vertical-alignment.
2. A strong organisational t of reward policies and practices with the structure and design of the organisation.

3. Alignment of the reward practices with each other in a total-reward approach, and with the other HR programmes in the organisation, known as horizontal alignment.
4. Aligning with, and involving employees in the development and delivery of the reward strategy. 5. Treating the reward strategy development as a process of continuous improvement and interaction between principles and practices.

Reward changes are implemented without clearly agreed objectives and success measures, and that, in terms of what changes when and how, the priorities are often confused.

Your reward arrangements need to fit the design of your organisation and the management processes and systems it operates.

A well-integrated total reward strategy considers the components and relative emphases in the reward package across four major categories:

The financial rewards, such as base pay and incentives. The benefits, such as pension and life cover. The learning and development provided, whether from challenging work, career development or training programmes. The working environment, including the level of autonomy, worklife balance, feedback from management and level of communication and involvement (admittedly more difficult to cost and value than financial rewards, but often highly valued by staff and the prime determinant of why they leave an organisation).

Employee involvement is equally important for building understanding and trust, developing commitment and ensuring that strategic aims can be delivered in the realities of day-to-day working in the organisation.

A truly effective reward strategy is not just a pristine document and set of goals approved by the board. The concept of alignment and fit tends to imply that there is some form of perfect fit between business and employee needs, and reward, that can be achieved, and then you can-relax-and do something else.

Diagnosis

Implementation

Detailed Design

Testing & Preparation