New practical guide to managing reward risks


New practical guide to managing reward risks

Reward risks are on the increase, but practitioners are struggling to manage these in a way that ensures risk is balanced against the need for reward to support and encourage agility and change. That’s one of the main messages to emerge from a fascinating new study for the Chartered Institute of Personnel and Development by Jonathan Chapman of Cranfield School of Management.


The report aims to provide senior HR and reward professionals with a framework to help them identify and review the main reward risks faced by their organisation as well as providing some tools to assist them in managing and mitigating these risks.

Charles Cotton, CIPD Adviser for Reward and Performance, said: “Savvy reward professionals are assessing their reward strategy and systems to ensure they are fully aligned with business objectives and are firmly geared towards driving sustainable business performance and success”.

How to identify, assess and manage reward-related risks

The research identifies five clear steps that reward practitioners and their HR colleagues can take to more effectively identify, assess and then manage the reward related risks that organisations face. HR can prepare better by adopting these simple steps:

1. Establish effective reward risk intelligence gathering systems.
2. Review your reward strategy and systems for risk.
3. Use established risk management tools to assess and manage identified reward risks.
4. Know your reward risk appetite and manage risk consistent with this.
5. Build your risk management capability and develop a permanent risk management culture.

A final word

“As our report makes clear, risk management is not a barrier to risk-taking. Rather, risk-taking is at the heart of all organisational activity and is crucial if employers are going to successfully seize the opportunities afforded to them by the changing business environment. This report will help HR assist their employer in seizing these opportunities.” - Jonathan Chapman, Management Education Fellow, Cranfield School of Management.

Want to know more?

Title: Managing Reward Risks: An integrated approach, by Jonathan Chapman (Cranfield School of Management), published by Chartered Institute of Personnel and Development, October 2009.

Availability: The 39-page report can be found on the CIPD web site at

Cranfield School of Management is “one of Europe’s leading university management schools renowned for its strong links with industry and business”. It is committed to “providing practical management solutions through a range of activities including postgraduate degree programmes, management development, research and consultancy.” To find out more visit

The Chartered Institute of Personnel and Development (CIPD) is “Europe’s largest HR and development professional body with over 135,000 members, supporting and developing those responsible for the management and development of people within organisations”. To find out more visit