Setting a reward strategy that works

A well-designed and comprehensive reward strategy can be transformational for any company - positively or negatively! The talent landscape continues to be highly competitive and at the same time, people budgets remain under close scrutiny. As companies operate in a remote environment, navigate a global markets and balance high employee expectations, setting the right reward strategy for your company can be a daunting task.

Strategies are also crucial to enable the development of reward principles. These will be the ones that guide your decision-making on an day to day basis. Ready to get stuck in? Here's a useful guide on how to develop a sustainable reward strategy:

1. Aim for business alignment: ultimately, any reward strategy has to work for each specific business. And no two are the same. Consider what the key business goals are, what outcomes/ behaviours you want to encourage and how can your strategy align with them. If you're a bootstrapped start up perhaps a weighted cash compensation component may work best than if you're an established scale up, where long-term incentives may prove more suitable for the business and the talent pool you're targeting. Business alignment includes stakeholder buy in - identify early on who they are and how you can bring them along for the journey.
2. Know your market: market research is crucial in the reward space. Understand who your competitors are - both from a business point of view but even more importantly from a talent point of view. What do they offer and how do you want to compare. Don't stop at external benchmarking surveys; ask your employees what matters to them and what they'd like to see. You may get some quirky answers but establishing a feedback loop early on will increase your understanding of what your team needs and foster trust in reward.
3. Take a holistic approach: there's so much more to reward than compensation. Consider all core elements of reward: compensation, bonuses, equity, benefits, recognition and wellbeing. More importantly, ensure you make them connect with each other. You may not be able to offer them all but understanding how they sync with each other and what you can leverage now and in the medium term will future proof your strategy.
4. Be financially sustainable from the start: you never know how the talent market will evolve or how your company finances will fare over time. Being budget conscious and making any strategy financially viable will enable you to deal with future surprises in a more robust way. Find the right balance between competitive rewards and cost efficiency that works for your company.
5. Have transparency as a guiding principle: build transparency in your reward strategy from the get go. Not only does this build trust and engagement but it also empowers employees and businesses to have better conversations around reward policies; think about promotions, salary progression discussions, pay equity, performance bonuses, new benefits, equity events etc. Employees should know how their rewards are determined and how they can influence them. Listen to your people - having feedback mechanisms by default is essential to create a culture of transparency.
6. Keep it dynamic and flexible: aim for a reward strategy that has a degree of flexibility to growth and evolve as your business and team does. Remember that your strategy isn't static and you'll need to review it based on internal and external factors on a regular basis.

Keen to implement your reward strategy during hiring? Here's how Dotti can help: you can build customisable warnings and approval flows for your reward offers that align with your pay practices. Maintaining consistency in your reward offering at hiring is simple and straightforward. Sign up to the waitlist below.