EVIDENCE-BASED REWARD

Extent to which evaluation takes place: e-reward 2009 Part – 32% Full – 45% None – 27%

The five most popular methods used to evaluate reward effectiveness: e-reward 2009 External market survey 113* Staff attitude survey 99* Benchmarking 71* Internal data analysis 66* Equal pay review 41* * Number of respondents out of 192 using method

The five most popular criteria used to evaluate reward effectiveness: e-reward 2009 Financial impact 103* External benchmarking 92* HR outcomes 91* Stakeholder views 70* Business outcomes 58* * Number of respondents out of 192 using criteria

Reasons for not conducting evaluations Lack of resources or time 48% 19% Lack of data 15% Senior management indifference 10% Organizational changes Lack of analytical skills 8%

The concept of evidence-based reward

An evidence orientation shows that decision quality is a direct function of available facts. Denise Rousseau

The management of reward systems based on fact rather than opinion, on understanding rather than assumptions, on grounded theory rather than dogma.

The EBRM model

Set goals and success criteria A model of evidence-based reward management Review Set goals and success criteria Implement Measure Evaluate Develop

Examples of reward objectives and success criteria This objective will have been successfully achieved when: Reward innovation objective Develop performance culture There is evidence of performance improvement from performance indicators Scores in the engagement survey have increased by x% Enhance engagement Develop employee value proposition There is evidence that attraction and retention rates have improved Introduce contribution-related pay There is evidence that it has improved performance

Examples of reward evaluation measures Reward strategy Clear reward strategy and annual plan supporting business strategy Financial and non-financial recognition for behaviours in line with strategy and values Financial and non-financial rewards Reward management general Quantity, quality and frequency of reward communications Engagement Surveyed overall employee engagement levels

What respondents to e-reward survey said

Do: Do it! Why should anyone spend £xxxxm per annum and not try and understand each element’s effectiveness (and leverage it more)? Be realistic about cause and effect Make sure you align the measures to the goals of your organization

Don’t: … vow to measure everything. … get too bogged down in the detail. … overcomplicate issues – try to do too much at once. … simply follow the CEO’s latest fad