Aligning Rewards with Organizational Values

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Although it is always important to know how much you should pay, it is actually more important to know how you should pay. Every organization must craft a rewards strategy that reflects its own mission and character. This strategy offers the greatest value and the competitive advantages needed to be successful in the marketplace. A strategy guides decisions and actions and helps to focus goal setting, policies, practices, behaviors, and investments. Strategies help the organization to achieve what it needs to be successful.

A rewards strategy is always linked to one or more of the components of the organization’s business plan. These components include market, environment, and regulatory and other factors that have an impact, or will, on the organization. Establishing the context for a total rewards philosophy is the first step in developing one. A rewards context contains the organization’s mission, key success factors and strategies, and core values.

Once an organization has a total rewards philosophy, it can define, and develop, the purpose of each primary reward program. These programs include base salaries, variable pay plans, employee benefits programs, and recognition. The total rewards strategy is built on the mission, strategy, and core values of the organization. This means considering the stage of development of the organization, and what is important to the people who work there.

A sound rewards strategy considers the nature and wants of the workforce. Understanding the current needs and aspirations of the workforce is essential to develop programs that are meaningful to individuals. The strength of an effective rewards strategy will be in how it achieves the right connection between the strategic business requirements of the organization and what is meaningful to the individuals who make the organization successful. This process translates the vision of the firm’s leaders into actions that people can use every day as part of their approach to talent management.
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Management
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