Employers should look at using a total recognition strategy in place of total reward in order to effectively align performance management with rewards.
This is because money is not always a motivator, said Chris Bones, dean at Henley Business School, speaking at Employee Benefits Live 2010. Alongside cash remuneration, employees are also likely to be motivated by factors such as development, engagement and rewards. For example, continued professional development plays a major role in total recognition, he added.
To encourage longer-term thinking, therefore, employers should use every aspect of employee motivation and recognition.
The political and social climates are also likely to change the nature of reward over the next couple of years, said Bones. For example, unemployment may rise but with regional disparities, which may drive employers to look at pay rates across the country. “[Organisations] with national pay rates, what is going to happen in the economy is unemployment is going to drive [them ] to think on a region-by-region basis,” said Bones.
He added that responsible employers should structure employees’ pay according to regional market rates rather than using a national scale. This would enable them to continue employing more people in local communities.
Other factors that could also impact reward practices include: the globalisation of talent and changing employee expectations.
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