Reward strategy concerns the design and implementation of

Reward strategy concerns the design and implementation of reward policies and practices that support and advance its objectives. All organizations have choices about how to reward employees. Some choose to provide stable basic salaries with predictable annual increases to increase retention and commitment. In contrast, others prefer to vary pay according to the individual or team performance to motivate employees to behave or perform in desirable ways. Some organizations think about reward in a much broader sense — a Total Reward approach that encompasses pay, benefits, development opportunities, and the working environment. Others aim to create a compelling Employee Value Proposition (EVP), a “deal” that underpins the employment relationship by balancing a total reward offering with employee performance. All of these approaches could be described as a strategic reward. Whether deliberately planned or an emergent response to environmental changes, reward strategies can have profound consequences for employee satisfaction, behavior, and performance. In recognizing that reward can be a powerful lever for change in organizations, managers need to think carefully about the reward choices they make and clearly set out the aims of their reward policies and practices. By being strategic in adopting reward practices that motivate employees to perform in specific ways, organizations can realize their objectives and improve

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