There is little doubt in most organisations that the major assets, the people, walk in and out of the business each day. People are the major creators of Added Value for their employers and they are also often the source of a considerable proportion of the total costs. For example, 50 employees can cost, on average, over £1m per annum.

Hence the need for a systematic, professional approach to REWARD MANAGEMENT.

It is important for the viability of any organisation to develop and implement strategies, policies and systems that are conducive to the achievement of the Corporate Mission – including policies and systems designed to manage the recruitment, motivation and retention of employees. 

Professional Reward Management aims to achieve the optimal reconciliation of the financial interests of the employee and the employer, ensuring that both parties perceive their relationship as a “win-win” arrangement: each party perceives that s/he is being treated fairly and getting a good deal from the employment relationship.

The Essential Elements of Reward Management

• people are rewarded in relation to their actual or potential value to the organisation – as measured by their contribution
  
• the personal needs, aspirations and goals of employees are recognised
  
• rewards and incentives are matched to personal needs and the organisation’s mission/resources
  
• rewards are planned and managed strategically to ensure that salaries and wages do not drift out of control and out of line with the labour market
  
• the  process is systematic but not mechanistic

 Salary and Wages Drift

Organisations frequently suffer from Wages and Salary Drift of around 10%. The consequences for the bottom line are enormous.

Consider an organisation with a total salary bill of approximately £2 million, inclusive of employment costs. A 10% wages and salaries drift in this company is £200,000, which comes straight off the bottom line.

It is often found that around 3 percentage points of a wage drift (i.e. 30% of the above 10%) can be “clawed back” over time without too much pain or effort. In this case some £60,000 could be clawed back. To achieve this order of saving the managers must decide where they should be and where they want to be in relation to the organisation. Then, after comparing where they actually are in terms of salaries and benefits being paid, the managers can plan a process of bringing the actual rewards into line with the desired rewards over a period of time.

A “firefighting” approach to reward management, where there is a failure to manage rewards systematically, can cause an organisation to lose its competitiveness; and it can sometimes force a company out of business.

Reward Management is a continuing process - not an “isn’t it time we had a review?” process. It is necessary for the secure long-term development of most organisations in a competitive world.

Managing Rewards through Job Evaluation

Job Evaluation is a long-established tool of Personnel Management that enables an organisation to establish internal relativities and to bring a systematic approach to the talk of comparing job values.

It enables the “relative worth” of jobs to be reflected on grading and payment arrangements as objectively as possible. There is no scheme that is entirely objective on this complex area of people management but Job Evaluation reduces the degree of subjectivity in making job comparisons.

Job Evaluation involves the application of objective criteria and relevant job factors in the design of jobs and the design of job descriptions. It then creates and assigns “job values”.

The Institute of Administrative Management established its special scheme for the evaluation of jobs in office environments, “IAM Office Job Evaluation Scheme” (OJE), over 55 years ago.

Since then it has been used by more than 2,000 UK organisations. The OJE has offered managers over these many years the opportunity to implement organisational structures that have been designed objectively and professionally to achieve the optimal utilisation of human resources in the pursuit of corporate missions.

Job Evaluation is a management technique that is recognised as fair technique by employers and trade unions alike. However, the fact that it is so objective, analytical and systematic makes Job Evaluation an intrinsically time-consuming process.

To reduce the time and cost involved in implementing a sound Job Evaluation Scheme, the Institute in 1992 entered onto a partnership with LogoSoft (UK) Ltd for the development of a totally new, computerised reward management tool which encompassed all that was best of the old OJE. Since 2003 the Reward Manager has been solely owned by LogoSoft (UK) Ltd.

The computerised scheme, REWARD MANAGER, is very easy and convenient to use a cost effective  means of managing rewards professionally.

This is a fully comprehensive software package for the management of rewards across the whole of an organisation. It is no longer concerned only with jobs in office or administrative environments. It embraces jobs in all functions across any organisation, and at all organisational levels – ranging from the Chief Executive to front-line managers.

REWARD MANAGER automates the reward management process, reducing the time normally spent on job evaluation by around 50%, enabling changes to be made at any time.

Although it contains and uses pre-defined and graded job elements REWARD MANAGER offers a convenient facility to add new elements unique to any particular user organisation.

REWARD MANAGER is truly international in its application and just as valid for overseas use.