Reward System Framework

Successful organizations in today's environment are shifting emphasis from the traditional command and control to a more collaborative philosophy of management. They are shifting from:

• Focus on products to focus on customer needs
• Enduring structures to speed and responsiveness
• Tight control to partnerships and teamwork
• A fair day’s pay for a fair day’s work to rewarding results and process

The primary weaknesses of traditional reward systems are that they are:

• Not focused on reinforcing institutional goals
• Seldom really contingent on what one does or achieves
• Focused on results with little understanding of the process
• Not integrated with key business imperatives
• Based on the concept of command and control, not in creating shared success

The primary purpose of a reward system should be to reinforce institutional goals by using not only base compensation and recognition strategies that have been the mainstay of traditional reward systems, but also variable compensation that addresses:

• Specific and extraordinary individual or team accomplishments
• Achievement of specific organizational goals well beyond standard job requirements
• Accomplishment of special projects or assignments