Total Rewards Management in an Organisational and International Context

Purpose and aim of module
This module examines total rewards in an organisational and international context and provides learners with the knowledge and understanding of environments in which reward professionals plan, implement and evaluate employee reward policies to support strategic organisational goals. They will acquire both theoretical and normative understanding of the diverse approaches to reward management and be able to critically reflect on the strengths and limitations of these approaches in promoting individual and organisational performance in a fair, reasonable and equitable way. The foundations for pay and benefits management in modern organisations in the private, public and third sectors and how these traditions can be integrated into appropriate strategic designs that provide considerations of relative value and worth, individual and collective contribution and labour markets is examined.  Learners will be able to comprehend the relationship between traditional, contingent and developmental choices of rewards, the use of diagnostic and evaluative skills in designing flexible approaches to reward and the challenges of international and executive pay arrangements.  Critical reflection on theory and practice from an ethical and professional standpoint and for continuous professional development is required. 

This module is suitable for persons who:
Have responsibility for human resource (HR) decision making within an organisation at either operational, tactical or more strategic level
Are HR professionals in a team or HR functional management role who are seeking to enhance and develop their career
Have responsibilities for the HR function and activities within an organisation without a specialist function
Are independent or employed consultants who support organisations in meeting their goals
Have HR career and CIPD professional membership aspirations.

Learning outcomes
On completion of this module, learners will be able to:
1 Analyse the relationship between the environment, strategy and systems of reward management.
2 Explore the conceptual apparatus and theoretical debates informing reward management. 
3 Critically discuss traditional, contingent and knowledge bases for transactional and relational rewards.
4 Design internally consistent reward structures that recognise labour market and equity constraints.
5 Analyse executive and expatriate rewards in an international context.
Critically evaluate key issues in reward management. 

Indicative module content
Indicative content is provided for each learning outcome. This is neither prescriptive nor exhaustive but should enable achievement of the learning outcomes.

 

1 Analyse the relationship between the environment, strategy and systems of reward management.
Reward management as an HR practice in a global context; wage flexibility; strategic perspectives on reward and the link to brand and organisational performance; government, employer, employee and institutional constraints on strategic choice of reward practice; influences and criticisms of reward management thinking: systems approach and total rewards; towards a total rewards approach.

Learning outcomes

 

2 Explore the conceptual apparatus and theoretical debates informing reward management.
The relevance of theory in reward management; Economic theories of reward: labour market, human capital, efficiency wage, agency, internal labour market, union mark-up, tournament; Social psychological theories of reward: the psychological contract, expectancy and equity; Institutional theories of reward: economic democracy and financial participation, collective bargaining and pay determination. 

 

3 Critically discuss traditional, contingent and knowledge bases for transactional and relational rewards.
Wage and salary remuneration in context; rewarding seniority, merit and performance in supporting competitive strategy; profit-sharing; gain-sharing, employee share schemes; contingency pay; reward and ownership; job evaluation; managing risk and promoting sustainability; knowledge, competency and skill-based pay; pension schemes; non-financial rewards, employee recognition schemes, non-cash incentives, flexible working and performance review; flexible benefits. 

 

4 Design internally consistent reward structures that recognise labour market and equity constraints.
Linking strategy and structure; diagnosing the need for change in pay structures; design choices; implementing pay structures; evaluation of pay structures’ contribution to organisational success; differentials and pay relativities.

 

5 Analyse executive and expatriate rewards in an international context.
The complexity of international reward management; the role of corporate governance in public and private sectors; remuneration committees; executive status, reward, benefits and pension packages; short-term and long-term incentives; expatriate status, location and assignments; setting base pay and benefits for expatriates; compensation and incentives; repatriation and pay. 

 

6 Critically evaluate key issues in reward management. 
How strategic is pay? The influence of employee voice on pay determination; legal regulation and pay: pay review bodies and the minimum wage; local pay and national pay; rewarding the person or the job?, gender, age and pay; labour market and equity: a contradiction?; future directions of reward management.

Assessment brief activity 

Preliminary tasks

1. Research and identify the advantages and disadvantages of performance related pay from both theoretical and practical perspectives.

 

2. Identify a performance related pay scheme in your organisation or an organisation with which you are familiar and clearly identify its aims and objectives.

 

3. Arrange a semi-structured interview with one or more managers responsible for the scheme and three employees rewarded by the scheme. Then ask both managers and employees the following questions (adapted from Armstrong, 2002):

a.How is good and poor performance measured and/or identified?

b.Have the causes of good and poor performance been established?

c.How is performance rewarded (both positive and negative)?

d.Is the way in which performance is rewarded fair?

e.Are there any inconsistencies in the way performance is rewarded?

 

It is important that you probe and get as much information as possible from both managers and employees. 

On completion of the above tasks, provide a report of 3000 words to your Chief Executive Officer that: 

 

1. Critically evaluates how the aims and objectives of the scheme are underpinned by the theoretical and practical perspectives and fit with the organisation’s aims and objectives.
 
2. Critically evaluates the effectiveness of the scheme. 

 

3. Presents conclusions as to whether the scheme meets its objective and those of the organisation and provides recommendations for the management of performance related pay in the organisation.