We use the term freely, but what does it actually mean?
Strategic Remuneration is about linking remuneration to organisation performance.
A crucial ingredient in the strategic remuneration mix is recognition of the uniqueness of organisations.
This takes account of the fact that what may be appropriate in one organisation, may not necessarily work for another. Yet how often do we hear of organisations trying to apply systems and processes because such and such an organisation has used it successfully?
Often this seems to take no account of the fact that the organisations may be operating in different industries, are at different stages of the organisational life cycle, and have totally different organisational cultures? Sad, but it’s true.
By redefining remuneration programmes as a strategic investment, and recognising their potential to contribute to the achievement of organisational objectives, employers can successfully turn remuneration programmes to their competitive advantage.
Cut down to the basics, the term strategic remuneration encompasses the areas of:
- Job evaluation/job sizing
- Design and implementation of remuneration structures
- Development of integrated performance management systems
- Design of bonus, incentive, and employee ownership plans
- The area of non monetary rewards
- The development of software or administrative systems to support remuneration strategy.
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