Developing a Reward Strategy t

Essay by EssaySwap ContributorUniversity, Master's February 2008

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Developing a Reward Strategy that Delivers Shareholder and Employee Value The New Competitive Context: Today business faces the biggest and most difficult times ahead. With the ever changing moods and directions that business is taking almost daily, it is impossible to have a strategy set in place. There is no true "one way of doing things" and it is almost impossible to say that one strategy is the way to go. Knowing this the truly successful companies will be the ones who: Are linked to their suppliers, Global, Cross-functional, Built around knowledge workers and organize with a capacity for continuos change. With these guidelines set in place it is important to realize how to gain a competitive advantage. This is accomplished by innovation in technology, speed to market and creating customer value.

Human Capital is the key to competitive advantage. It is only when the employee truly has his own goals set in motion that gives the company the true advantage that cannot be taken away unless your employees are acquired by other companies.

Human Capital is a combination of employee capabilities and their commitment.

An Aligned HR System Is The Key: An organization has various "levers" for developing Human Capital into competitive advantage as shown in Exhibit1. These must be properly integrated to work. Doing What has worked in the past will only lead to complacency. This figure demonstrates how to develop a working "culture". A culture designed to work faster, communicates more efficiently and gives a focused joint effort as a goal. Exhibit 2 presents a model for developing an integrated Hr approach to creating both shareholder and employee value Reward Systems: Reward systems are a crucial part of this development. This aids in behavioral modification and creates drive and performance. Some negative aspects of rewards are that...