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1 REWARD MANAGEMENT This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

2 REWARD MANAGENENT DEFINED
Reward management deals with the strategies, policies and processes required to ensure that the contribution of people to the organization is recognized by both financial and non-financial means. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

3 REWARD MANAGEMENT PROCESSES AND ACTIVITIES
Non-financial rewards Employee benefits Market rate analysis Business/ HR strategy Reward strategy Grade and pay structure policy Grade and pay structure Total remuneration Total reward Improved performance Job evaluation Contingent pay Performance management Learning and development This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

4 DEVELOPMENTS IN REWARD MANAGEMENT
Business-driven focus Aligning rewards with business strategy and employee needs Isolated initiatives Integrated reward management Focus on financial rewards and incentives Focus on total rewards, engagement and commitment Reward system: mechanistic, inflexible, over-complex Reward process: organic, variable, relatively simple Best practice Best fit Inform (perhaps), management decides Communicate and involve

5 STRATEGIC REWARD This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

6 STRATEGIC REWARD DEFINED
An approach to the development and implementation over the longer term of reward strategies and the guiding principles that underpin them. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

7 DEVELOPING REWARD STRATEGY
Analyse business/HR strategy Analyse present arrangements Identify future reward needs Assess needs of stakeholders Develop integrated total reward strategy Consult and involve senior management and line managers Guiding principles Consult, involve and communicate with employees Define, justify and agree intentions: job evaluation market position grade/pay structure contribution pay pensions and benefits This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

8 DEVELOPING AN INTEGRATED REWARD STRATEGY
BUSINESS STRATEGY Innovation Continuous improvement Operational effectiveness Market development Cost control HR STRATEGY Total reward Resourcing Performance management Learning and development Employee relations Work environment This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

9 INTEGRATED STRATEGIC REWARD AT GLAXOSMITHKLINE
Business strategy To be the indisputable leader in the pharmaceutical industry. Portfolio – build the best pipeline (the time it takes to bring a drug to market). Product commercialization – developing products from a ‘molecule’ into a blockbuster drug. Global competitor – having a global mindset where appropriate. Operational excellence – to be the best-managed organization. Processes should be slick, smooth and efficient. HR strategy Reward strategy ‘We want GSK to be a place where the best people do their best work.’ Stress pay for performance. Increase the proportion of pay at risk. Emphasize total reward – total cash, lifestyle benefits, and savings choices. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

10 INTEGRATED STRATEGIC REWARD AT LANDS’ END
Business strategy Enhance the brand – drive sales through stronger alignment of merchandizing, creative and marketing. Put the customer first. Execute focused strategies – source better-quality products for the best value. Be a great place to work. Entrepreneurial growth through new business development. HR strategy Reward strategy Based on the principle that staff who are enjoying themselves, are being supported and developed, and who feel fulfilled and respected at work will provide the best service to customers. Based on total rewards rather than just pay. Focus on physical, emotional, intellectual, social, spiritual and occupational rewards that represent different aspects of the whole person. Seven key strands: financial rewards, career development, pride, appreciation, make work challenging and fun, good leader relations, involvement. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

11 INTEGRATED STRATEGIC REWARD AT B&Q
Business strategy To improve productivity and profitability and maintain B&Q as the number one home-improvement retailer in the UK. HR strategy Reward strategy Enhance employee commitment and minimize the loss of B&Q’s best people. Position B&Q as one of the best employers in the UK. Develop new reward philosophy that sends the right signals on corporate values and beliefs. Create a new employment value proposition that makes B&Q an employer of choice. Introduce new store-team bonus. Develop family-friendly benefits. Introduce recognition programmes. Introduce new pay and progression arrangements. Provide total reward statements. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

12 TOTAL REWARD This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

13 TOTAL REWARD DEFINED Total reward includes all types of reward – non-financial as well as financial, indirect as well as direct, intrinsic as well as extrinsic. It is a value proposition that embraces everything that people value in the employment relationship and is developed and implemented as an integrated and coherent whole. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

14 THE COMPONENTS OF TOTAL REWARD
Transactional rewards Base pay Total remuneration Total reward Contingent pay Employee benefits Relational rewards Learning and development Non-financial rewards The work experience Recognition, achievement, growth This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

15 TOTAL REWARD FRAMEWORK (TOWERS PERRIN)
TRANSACTIONAL (TANGIBLE) PAY/REWARD Base pay Contribution pay Shares/profit sharing Recognition BENEFITS Pensions Health care Perks Flexible benefits INDIVIDUAL COMMUNAL LEARNING AND DEVELOPMENT Workplace learning Training Performance management Career development WORK ENVIRONMENT Core values Leadership Employee voice Job/work design This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources. RELATIONAL (INTANGIBLE)

16 TOTAL REWARD MODEL – WorldatWork
Total rewards are all the tools available to the employer that may be used to attract, motivate and retain employees. Total rewards include everything the employee perceives to be of value resulting from the employment relationship employee satisfaction and engagement business performance and results organizational culture business strategy HR strategy total rewards strategy compensation benefits work–life performance and recognition development and career opportunities attract motivate retain This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

17 TOTAL REWARD MODEL – Watson Wyatt
business strategy human capital strategy total reward strategy fixed reward costs performance-based rewards environment-based rewards fixed costs of employment variable costs of employment intrinsic rewards value of role to organization contribution made by individual employment deal effective delivery through focused communication, greater flexibility and use of technology This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

18 TOTAL REWARD IN KWIK-FIT Performance management
‘make the work worth it’ Organization design What should I be doing? How should I be doing it? roles and accountabilities communications and clarification Strategy, vision and values How am I doing? How can I grow? learning and development performance culture coaching What’s in it for me? base pay incentive pay benefits flexibility recognition Reward Performance management This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

19 JOB EVALUATION This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

20 JOB EVALUATION DEFINED
Ian Could you add one more like this but with a woman rather than a man? Thanks Michael A systematic process for defining the relative worth or size of jobs or roles within an organization to establish internal relativities and provide the basis for designing an equitable grade structure, grading jobs in the structure and managing relativities. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

21 PURPOSES OF JOB EVALUATION
To provide an equitable, fair, consistent and transparent basis for determining the relative value of jobs. To help in the management of job relativities. To provide the basis for ensuring that equal pay for work of equal value is achieved. To provide a basis for the design and maintenance of a rational and defensible grade structure. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

22 APPROACHES TO VALUING JOBS
Analytical job evaluation (point-factor rating or analytical matching) – decisions on the relative value or size of jobs are based on an analysis of the degree to which various defined elements or factors are present in the form of demands on the job holder. Non-analytical job evaluation (job classification or ranking) – whole jobs are described and compared so as to slot them into a defined grade or place them in a rank order without analysing them into their elements. Market pricing – jobs are placed in pay structures entirely on the basis of external relativities, ie market rates (NB a method of pricing jobs but not job evaluation as usually defined). This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

23 FEATURES OF JOB EVALUATION
Maximize objectivity by basing judgements on factual evidence rather than opinion. Aim to achieve consistency. Provide a framework of defined yardsticks to channel judgements. Evaluate the job not the person. Concerned only with internal relativities, (applicable only to analytical or non-analytical job evaluation schemes). This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

24 DEVELOPING A POINT-FACTOR SCHEME
This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

25 CRITERIA FOR CHOICE OF JOB EVALUATION SCHEME
Thorough in analysis and capable of impartial application. Appropriate for the jobs to be covered by the scheme. Comprehensive – cover all jobs in the organization. Transparent. Non-discriminatory. Easily administered. Not subject to decay. Provide a defence in an equal pay case. Point-factor schemes can meet all these criteria, except possibly being easily administered and not liable to decay. They are by far the most popular scheme. Analytical matching schemes can meet all the criteria, including being relatively easy to administer and not so liable to decay. They are becoming more popular. Some organizations (eg NHS Agenda for Change) use a traditional point-factor scheme initially as the basis for evaluation but then adapt it as an analytical matching scheme and operate it as the main ongoing approach. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

26 POINT-FACTOR RATING METHODOLOGY
Select and define job evaluation factors (a factor is a characteristic or element of a job that is present in all the jobs being evaluated but to different degrees). Define the levels or degrees at which each factor can be present. Decide the maximum points to be allocated to each factor (these may be weighted according to their relative significance). Divide the maximum points for each factor between the levels – each level therefore has a points score attached to it. Analyse jobs in terms of the factors. Refer to factor plan (factor and level definitions) and decide on score for each factor. Add factor scores to determine total score for the job. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

27 A FACTOR PLAN Factor Level 1 Level 2 Level 3 Level 4 Level 5 Level 6
Expertise 20 40 60 80 100 120 Decisions Autonomy Responsibility Interpersonal skills This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

28 JOB EVALUATION SCORING
Factor Level 1 Level 2 Level 3 Level 4 Level 5 Level 6 Expertise 20 40 80 100 120 Decisions 60 Autonomy Responsibility Interpersonal skills 60 80 60 60 100 Total score = 360 This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

29 FACTOR DEFINITION: EXPERTISE
The level of professional, technical, administrative or operational knowledge and skills demanded by the work. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

30 FACTOR LEVEL DEFINITIONS: EXPERTISE
Level 1 – The use of basic skills to carry out routine administrative or operational work. Level 2 – The application of administrative or operational knowledge and skills to carry out straightforward administrative procedures, including maintaining records and answering routine queries, or to operate specialized but not unduly complex machines. Level 3 – Advanced administrative work or operational work that may involve using complex equipment, maintaining complex records, dealing with non-routine queries or analysing data. Level 4 – Proficiency is required in a professional, administrative or specialist field involving the understanding and application of fairly advanced practices, procedures or principles. Level 5 – Considerable competence in a managerial, professional or highly technical field in order to understand or apply advanced practices, procedures, concepts or principles. Level 6 – A very considerable degree of competence is required to direct and control activities at the highest level. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

31 DESIGN PRINCIPLES Factors to cover range of job features in each of the main job categories. Levels clearly defined and graduated. Minimize double counting. Avoid gender bias (sex discrimination). This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

32 POINT-FACTOR JOB EVALUATION SCHEME DESIGN SEQUENCE
Decide to develop scheme Formulate communication strategy Select and train project team Prepare project programme Identify and define factors Produce basic factor plan Select and analyse test jobs Test basic factor plan Amend plan as necessary Develop scoring model Decide on weighting Communicate as required throughout project Produce full factor plan Amend plan as necessary Computerize as required Test full factor plan Amend as required Test computerized system Apply to benchmark jobs

33 A TYPICAL JOB EVALUATION PROGRAMME
Activity Month 1. Prepare initial factor plan 2. Test initial factor plan 3. Prepare final factor plan 4. Test final factor plan 5. Computerize 6. Test computerized version 7. Evaluate benchmark jobs 8. Conduct market survey 9. Design pay structure 10. Evaluate remaining jobs 11. Define procedures 12. Implement This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

34 ANALYTICAL MATCHING JOB EVALUATION SCHEME DESIGN SEQUENCE
Identify and define matching factors Define benchmark role profiles Define level profiles Develop matching procedure Test matching procedure Prepare individual role profiles for matching Train matching panel Conduct matching

35 GRADE AND PAY STRUCTURES
This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

36 GRADE STRUCTURES Ian Could you add one more like this but with a woman rather than a man? Thanks Michael A grade structure consists of a sequence or hierarchy of grades, bands or levels into which groups of jobs that are broadly comparable in size are placed. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

37 PAY STRUCTURES A pay structure defines the different levels of pay for jobs or groups of jobs by reference to their relative internal value as determined by job evaluation, to external relativities as established by market rate surveys and, sometimes, to negotiated rates for jobs. It provides scope for pay progression in accordance with performance, competence, contribution or service. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

38 GUIDING PRINCIPLES: GRADE AND PAY STRUCTURES
Grade and pay structures should: • be appropriate to the culture, characteristics and needs of the organization and its employees; • facilitate the management of relativities and the achievement of equity, fairness, consistency and transparency in managing gradings and pay; • provide scope as required for rewarding performance, contribution and increases in skill and competence; • clarify reward, lateral development and career opportunities; • be constructed logically and clearly so that the basis upon which they operate can readily be communicated to employees; • enable the organization to exercise control over the implementation of pay policies and budgets. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

39 MODEL OF A NARROW-GRADED STRUCTURE
This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

40 MODEL OF A BROAD-GRADED STRUCTURE
This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

41 MODEL OF A BROAD-GRADED STRUCTURE
K k k k k k k This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

42 Broad band Broad grade £
This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

43 MODEL OF A JOB-FAMILY STRUCTURE
Job families This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

44 MODEL OF A CAREER-FAMILY STRUCTURE
JE points Career families This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

45 A PAY SPINE Pay spine This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

46 MODEL OF SPOT-RATE STRUCTURE
This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

47 MODEL OF INDIVIDUAL JOB RANGE STRUCTURE
This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

48 CONTINGENT PAY This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

49 CONTINGENT PAY DEFINED
Individual contingent pay relates financial rewards to the performance, competence, contribution or skill of individual employees. It provides an answer to the two fundamental reward management questions: 1. What do we value? 2. What are we prepared to pay for? This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

50 DISTINCTION BETWEEN PERFORMANCE AND CONTRIBUTION
A distinction can be made between performance (what a person achieves) and contribution (the impact made by that person on the performance of the team and the organization). The level of contribution will depend on the competence, knowledge, skill and motivation of individuals, the opportunities they have to apply their knowledge and skills, and the use they make of the leadership, support and guidance they receive. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

51 ARGUMENT FOR CONTINGENT PAY
Those who contribute more should be paid more. It is right and proper to recognize achievement with a financial and therefore tangible reward. This is preferable to paying people just for ‘being there’ as happens in a service-related system. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

52 ARGUMENT FOR CONTNIGENT PAY
Those who contribute more should be paid more. It is right and proper to recognize achievement with a financial and therefore tangible reward. This is preferable to paying people just for ‘being there’ as happens in a service-related system. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

53 RATIONALE FOR CONTINGENT PAY
To recognize and reward better performance. To attract and retain high-quality people. To improve organizational performance. To focus attention on key results and values. To deliver a message about the importance of performance. To motivate people. To influence behaviour. To support cultural change. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

54 ARGUMENTS AGAINST CONTINGENT PAY
It is not an effective motivator (amounts usually too small). Money alone will not produce sustained motivation. It cannot be assumed that all people will be motivated equally by money. Financial rewards may motivate those that get them but are likely to de-motivate those that don’t. Can cause dissatisfaction if they seem to operate unfairly or inequitably. It depends on accurate methods of measurement that might not be available. It relies on managerial judgement that could be partial, inconsistent or ill-informed. People cannot necessarily control their own performance. It can be prejudicial to team work and quality. Requirements for success are exacting. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

55 CRITERIA FOR CONTINGENT PAY
Individuals and teams should have a ‘clear line of sight’ between what they do and the reward they will receive for doing it, as modelled below (source E E Lawler): The reward must be worth having. Fair and consistent means are available for measuring or assessing performance, competence, contribution or skill. People must be able to influence their performance by changing their behaviour and developing their competences and skills. The reward should follow as closely as possible the accomplishment that generated it. Source: E E Lawler (1988) Pay for performance: making it work, Personnel, October, pp 25-29 Effort Performance Results Measures Pay out This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

56 TYPES OF CONTINGENT PAY
Type of scheme Main features Performance-related pay Pay increases related to the achievement of agreed results defined as targets or outcomes. Scope provided for consolidated pay progression within brackets or for cash bonuses. Progression often governed by performance ratings using a formula (a pay matrix). Competence-related pay Pay increases related to the level of competence people achieve in carrying out their roles. Scope provided for consolidated increases within brackets or within a zone in a broad-banded structure. Progression may be governed by ratings and a matrix but can be related to more general assessments of competence development. Contribution-related pay Pay increases related to both the outcomes of work and the inputs provided by individuals in the shape of their levels of competence. Progression may be governed by ratings and a matrix but can be related to more general assessments of contribution. Skill-based pay Pay increases linked directly to increases in skill – the application of a wider range or higher level of skills to different tasks. Often associated with shop-floor workers or sales staff on spot rates. This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

57 PERFORMANCE-RELATED PAY MODEL
Pay related to the achievement of agreed results (targets or outcomes) Agreed outcomes (targets) Performance measures Performance Rating Formula Performance pay This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

58 PRP PAY MATRIX Percentage pay increase according to performance rating and position in pay range (compa-ratio) Rating Position in pay range 80%–90% 91%–100% 101%–110% 111%–120% Excellent 12% 10% 8% 6% Very effective 4% Effective 3% Developing Ineligible This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

59 COMPETENCE-RELATED PAY MODEL
Pay related to the level of competence achieved Agreed competence levels Competence level definitions Competence (evidence of level) Rating or assessment Formula or methodology Competence- related pay This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

60 CONTRIBUTION-RELATED PAY
Outcomes What results have been achieved Contribution The part played by someone in achieving a team or organizational goal Inputs How the results have been achieved This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

61 CONTRIBUTION-RELATED PAY MODEL (1)
Pay related to the both outcomes (results) and inputs (level of competence) achieved Agreed Outcomes (results) Performance measures Performance (results achieved) Rating or assessment Formula or methodology Contribution pay Agreed competence levels Competence level definitions Competence (evidence of level) This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

62 This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.

63 CONSOLIDATED INCREASES RELATED TO COMPETENCE UP TO REFERENCE POINT; CASH BONUSES PAID ABOVE REFERENCE POINT FOR SPECIAL ACHIEVEMENTS 90% Recruitment Consolidated increases related to competence 100% Reference point Fully competent – aligned to market rate A Bonuses for exceptional performance – successive bonuses consolidated B 110% C This resource is part of a range offered free to academics and/or students using Armstrong’s Essential Human Resource Management Practice as part of their course. For more academic resources and other FREE material, please visit and then click on Academic Resources.


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