7RWM: Reward Management - Analyse the relationship between the environment, strategy and systems of reward management.

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CIPD Advanced Qualifications – 7RWM: Reward Management

On final submission please enter your total word count for learning outcomes summatively assessed (excluding references):

Using the prompts: these are intended only as a guide; if you have your own ideas for completing this module please do not feel obliged to follow the prompts.  If you are using them, please be selective, otherwise it will be difficult to stay within the 3,000 word count.  Also remember that only 50% of the LOs are to be submitted for summative assessment.  To help keep within the word count and fulfil some if the elements of the GAC consider creating a presentation as evidence.

When following the prompts or using the suggested exam questions please keep in mind the overriding need to address the learning outcome.

By submitting this module, I confirm that the work/evidence presented for assessment is my own work. I have updated my declaration form as per the centre`s instructions and I will submit this at the end of the programme but I understand it may be required at any point throughout the programme. 7RWM: Reward Management

Learning Outcomes - on completion of this module, learners will be able to: 7RWM: Reward Management

1. Analyse the relationship between the environment, strategy and systems of reward management.

Indicative content: Reward management as an HR practice in a global context; wage flexibility; strategic perspectives on reward and the link to brand and organisational performance; government, employer, employee and institutional constraints on strategic choice of reward practice; influences and criticisms of reward management thinking: systems approach and total rewards; towards a total rewards approach.

Identify and analyse the internal and external factors which impact reward strategy.  These could include:

  • Labour market
  • Global financial crisis
  • Historical
  • Legal
  • Government
  • Ethical
  • Shareholders and share prices
  • technology

What are the benefits of a Total Rewards approach?

If you are short of relevant work place evidence you could conduct a STEEPLE analysis based on Reward in your organisation and make recommendations (prioritised and ideally with some thought to costs and benefits) and include as evidence.

You can also try this LMP exam question from January 2011

Managers increasingly view reward management as a strategic activity which can help achieve important organisational objectives.

i) What in your view are the major objectives that reward systems can help to achieve if they are effectively designed and implemented? Illustrate your answer with examples from your own organisation.

ii) Why are managers these days more inclined to define and communicate a clear `reward strategy` for their organisations than they were in the past?

Key reading: CIPD Research - Sustainable Organisational Performance

CIPD Podcast: 81

7RWM: Reward Management 

2.  Explore the conceptual apparatus and theoretical debates informing reward management.

  Indicative content: The relevance of theory in reward management; Economic theories of reward: labour market, human capital, efficiency wage, agency, internal labour market, union mark-up, tournament; Social psychological theories of reward: the psychological contract, expectancy and equity; Institutional theories of reward: economic democracy and financial participation, collective bargaining and pay determination. Analyse the relationship between the environment, strategy and systems of reward management.

Explore/outline key reward management theory.

To what extent are these relevant to your organisation/sector or to an organisation you are familiar with?  Identify the aspects which have been most influential.

How do pay policies manifest themselves/differ in different HR strategies such as best fit, best practice and RBVF?  (look at chapter 5 of David Farnham book).

To what extent has the psychological contract influenced reward management?  What are the benefits of taking greater account of the psychological contract?

Include discussion on TU/collective bargaining, if relevant to your organisation. 7RWM: Reward Management

3. Critically discuss traditional, contingent and knowledge bases for transactional and relational rewards.

  Indicative content: Wage and salary remuneration in context; rewarding seniority, merit and performance in supporting competitive strategy; profit-sharing; gain-sharing, employee share schemes; contingency pay; reward and ownership; job evaluation; managing risk and promoting sustainability; knowledge, competency and skill-based pay; pension schemes; non-financial rewards, employee recognition schemes, non-cash incentives, flexible working and performance review; flexible benefits.

Outline the components of the reward structure in your organisation or one you are familiar with.  What is the proportion of base pay to variable pay?  How does this differ according to seniority or part of the organisation?  Evaluate effectiveness/cost effectiveness.

Explore the link between performance and reward and your organisation`s objectives.

How can a reward strategy most effectively engage the most talented employees?

How can profit share/bonus schemes be motivational?  What are the pros and cons of alternative approaches?

How can reward strategy contribute to/be a differentiating factor in the employer brand?  How much information about your organisations reward structure/strategy is in the public domain/on your website? Analyse the relationship between the environment, strategy and systems of reward management.

You can also try this LMP exam question from May 2012

The influential American management writer and consultant W Edwards Deming was a prominent critic of performance-related pay schemes. Using colourful language to stress his key points he said this about them:

`They leave people bitter, crushed, bruised, battered, desolate, despondent, dejected, feeling inferior, some even depressed, unfit for work for weeks after receipt of rating, unable to comprehend why they are inferior. They are unfair, as they ascribe to the people in a group differences that may be caused totally by the system they work in.` To what extent do you agree with this point of view and why?

4. Design internally consistent reward structures that recognise labour market and equity constraints.

  Indicative content: Linking strategy and structure; diagnosing the need for change in pay structures; design choices; implementing pay structures; evaluation of pay structures’ contribution to organisational success; differentials and pay relativities.

Having looked at reward theories ad influences in earlier sections, evaluate the effectiveness of the current pay structure/strategy.

Identify problems/potential problems in pay differentials.

What are the salary hot spots?  These could relate to geographical location, skills or resource dependency.

What are the main advantages and disadvantages of pay benchmarking in determining reward strategy/direction?

Which organisations do you / your organisations benchmark against and why?

What benchmarking surveys does the organisation regularly subscribe to/participate in?  How valuable are these?

Analyse the relationship between the environment, strategy and systems of reward management.

7RWM: Reward Management

5. Analyse executive and expatriate rewards in an international context.

  Indicative content: The complexity of international reward management; the role of corporate governance in public and private sectors; remuneration committees; executive status, reward, benefits and pension packages; short-term and long-term incentives; expatriate status, location and assignments; setting base pay and benefits for expatriates; compensation and incentives; repatriation and pay.

Only undertake this fully if you have experience in international reward management.

What are the complexities in determining base pay for expatriates?

Consider influences such as cost of living, culture, political and social factors.

You can also try this LMP exam question from May 2011

International companies are usually keen to harmonise reward management practices across their global operations. However, this can pose difficulties when some staff are based in a country which has an individualist culture, and others work in a country with a collectivist culture.

What are the major advantages for multinational corporations in operating a single reward policy and employing a single set of reward practices across all their global operations?

Why is this problematic when some staff who are employed by the company share a collectivist culture, while others work in countries where an individualistic culture prevails? Draw on published research when developing your argument.

6.  Critically evaluate key issues in reward management.

Indicative content: How strategic is pay? the influence of employee voice on pay determination; legal regulation and pay: pay review bodies and the minimum wage; local pay and national pay; rewarding the person or the job?; gender, age and pay; labour market and equity: a contradiction?; future directions of reward management.

What are the key issues or challenges in reward management in your organisation, or one you are familiar with?  Use the Indicative Content to introduce issues specific to your organisation or sector.

To what extent is there fairness and transparency?

What challenges have been created from legislation relevant to rewards?

What has been the impact of auto-enrolment?

You can also try this LMP exam question from September 2011

Analyse the relationship between the environment, strategy and systems of reward management.

Despite 40 years of equal pay legislation, numerous research studies show that women are paid a good deal less than similarly qualified men. Organisations which proclaim their commitment to high standards of business ethics still routinely pay their male staff more than their female staff.

i. Why do you think this state of affairs persists?

ii. What needs to change in order to achieve a situation in which equal pay between men and women becomes a reality. 7RWM: Reward Management

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