The purpose of this toolkit is to provide practical guidance on the use of evidence-based reward management approaches as a means of improving the effectiveness of reward practices and providing guidance on what approaches, developments and innovations are required to achieve that end.
The toolkit starts with a definition of basic concepts and terms, continues with an overview of the components, activities and outcomes of evidence-based reward management (section 1) and then deals with:
This toolkit forms part of a large-scale research project on reward effectiveness undertaken by e-reward. Our partners for this work, the Institute for Employment Studies, is also doing an increasing amount of research and project work in this area. Our joint research project involved a survey of practice and experiences, the results of which were set out in eresearch 69. We will be supplementing the survey and toolkit with some in-depth case studies, to be published in a forthcoming eresearch report, which will examine in different settings how organisations are wrestling with issues concerning the review, measurement and evaluation of reward systems.
What is evidence-based reward management?
Evidence-based reward management recognises that reward systems exist to add value but often don’t, and that it is essential to assemble and analyse the evidence available on how well they are functioning so that improvements can be made where necessary. The process of evidence-based reward management involves: “The management of reward systems based on fact rather than opinion, on understanding rather than assumptions, on grounded theory rather than dogma”. The key message of this concept as expressed by Canadian academics Trish Reay, Whitney Berta and Melanie Kazman Kohn in their systematic review of the literature in 2009 is “evidence before action”.
Evidence-based reward management gathers internal data on the impact and effectiveness of reward strategies and practices. This involves research, analysis, measurement, evaluation and, importantly, seeking the views of stakeholders. Externally, it carries out systematic benchmarking of good reward practices and analyses and makes use of the practical outcomes of reward research projects. Evidence-based reward management provides the information and impetus which makes an integrated approach to reward management effective.
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What is evidence-based reward management?
Joint research project on reward effectiveness by e-reward and IES
Purpose of the toolkit
Contents of the toolkit
Basic concepts and terms
SECTION 1: COMPONENTS OF EVIDENCE-BASED REWARD MANAGEMENT
Chart 1.1: A model of evidence-based reward management
Checklist 1.1: The components of evidence-based reward management
SECTION 2: CONDUCTING A REWARD REVIEW
Identify the need for a reward review
Set up a reward review
Answer fundamental review questions
Define aims of reward review
Undertake internal research
Undertake external research
Conclusions and recommendations
Reward guiding principles
Example statement of guiding principles and standards
Chart 2.1: The reward review framework
Chart 2.2: The reward review sequence
Chart 2.3: Example reward gap analysis
Chart 2.4: Example of a reward effectiveness pathway
Checklist 2.1: Identifying the need for a reward review
Checklist 2.2: Setting up a reward review – questions to ponder
Checklist 2.3: Answering fundamental review questions
Checklist 2.4: Defining aims of reward review
Checklist 2.5: Information on present arrangements – organisation analysis
Checklist 2.6: Information on present arrangements – reward analysis
Checklist 2.7: Individual interviews – senior executives
Checklist 2.8: Individual interviews – line managers
Checklist 2.9: Focus group agenda
Checklist 2.10: Areas for external research
Checklist 2.11: Data analysis – key reward issues
Checklist 2.12: Data analysis – specific reward effectiveness questions
Checklist 2.13: Data analysis – reward gap analysis
SECTION 3: REWARD MEASUREMENT
Checklist 3.1: Commonly-used reward measures
SECTION 4: REWARD EVALUATION
Aims of reward evaluation
Methods of evaluation
Chart 4.1: The process of reward evaluation
Checklist 4.1: Possible evaluation criteria for assessing reward effectiveness
Checklist 4.2: Reward innovation and change objectives and success criteria
SECTION 5: VIEWS OF PRACTITIONERS
Checklist 5.1: Evaluating reward effectiveness – views expressed by respondents to e-reward/IES survey
SECTION 6: CONCLUSIONS
Answering fundamental questions
SECTION 7: RESOURCES
APPENDIX A: EXAMPLE OF CONCISE REWARD ATTITUDE SURVEY
APPENDIX B: EXAMPLE OF ENGAGEMENT SURVEY