Putting Reward Strategies at Risk

Interesting article in this monthsCIPD magazine about balancing risks and rewards (pay and benefits structures) to encourage optimum performance. They identify seven reward risk groups:

Strategic, Behavioural, Financial, Operational, Implementational and Change Management, Legal and Ethical and Governance.

If there is misalignment of reward strategy to organizational goals the risk could be an inability to attract and retain people necessary for organizational success. The rewarding of unproductive or inappropriate behaviours undermines any work done in staff development. Without appropriate reward cost management value for money is eroded. Inefficiencies, inaccuracies and frauds not being correctly identified, result in undeserving rewards. If Change Management is required and rewards are given irrespective of changes taking place then more cash goes down the drain. All employees must comply with legal, ethical and societal and coprprate governance requirements to obtain appropriate rewards. Otherwise the reputation of the organization suffers.
The article is written by Charles Cotton, CIPD advisor and Jonathan Chapman, Canfield School of Management mote information at
http://www.cipd.co.uk/subjects/pay/general/_managing-reward_risks.htm
Seems to me someone at long last has recognized that bonuses should only be paid to staff who really contribute to achievement of organizational goals and objectives