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UK employers adopting new reward agenda

REWARD MANAGEMENT

UK employers adopting new reward agenda

A new reward agenda is slowly emerging in the UK. Changes to traditional merit pay programmes to take account of competencies, greater use of variable rewards and an increased emphasis on employee share schemes are all high on this agenda, says Industrial Relations Services.

Merit pay losing its appeal

Merit pay linked to an assessment of personal achievement against pre-determined targets is undoubtedly losing its appeal , according to the IRS researchers — at least in its traditional format.

The study says: A question mark has long hung over IPRP [individual performance-related pay], especially its seeming inability to truly motivate the majority of employees to improve their performance, and now a growing number of employers have come to the conclusion that the expected benefits of such arrangements are unlikely to ever materialise.

IRS found that more and more employers are now using competency-related pay as companies attempt to retain the nature of merit pay but at the same time broaden what is measured by focusing on the input as well as the outputs of performance .

Other key findings of research:

  • An upsurge in companies offering staff equity in the companies they work for

  • broadbanding has become a popular way of introducing the necessary flexibility into many IPRP arrangements
  • job family structures are increasingly common
  • more companies are offering employees choice over some of the benefits they receive.

What you will find in this study by Industrial Relations Services

Spread across 64 pages, this report examines:

  • emerging trends and issues in reward management

  • changes in base pay management, including job evaluation broadbanding, and job families

  • why some organisations are looking at contribution-related pay

  • common forms of variable pay such as team bonuses, share schemes and profit sharing

  • developments in employee benefits, including a discussion of flexible benefits

  • three case studies: total reward at Cisco Systems, First Direct's flexible benefits package and share schemes at Tesco.



A final word

Employers tinker with remuneration packages to attain long-lasting alterations in employee behaviour and to initiate cultural change. Yet this is far too grand an aim for any single reward initiative to achieve. Short-term change often results after implementation of a new policy, but the modified behaviour is rarely enduring, especially if the returns do not match expectations or decline over time. Cultural change is impossible without significant alterations to how managers behave and how the organisation functions. — The new reward agenda , IRS Management Review 22, July 2001.

Want to know more?

Title: The new reward agenda , IRS Management Review 22, July 2001.

Availability: Contact the subscriptions department at Industrial Relations Services in London, tel: 020 7354 6742.

For more information about all IRS publications visit . . .

www.irseclipse.co.uk/index-pub.htm

Posted 18 October 2001