REPORT

USING YOUR OWN ORGANISATION INVESTIGATE THE

REWARD ENVIRONMENT AND PRODUCE A WRITTEN
REPORT ANSWERING THE BELOW QUESTIONS

GENERAL GUIDELINES

 Total word count of the assignment is 3,500 min to 3,900 max. (excluding the questions)
 Use 14 font size with 1.5 spacing
 Use Harvard Style Referencing/Citation, then list all sources at the end of the assignment
 Use online sources ONLY and books/papers in pdf format available online
 Use very simple and direct English language
 The report has to be in question-and-answer format with a small brief introduction and
conclusion
 Answer all questions by explaining the concept in general then briefly reflect on your
organization or one with which you are familiar

Q1.1 Use an appropriate analysis tool to identify the internal and external factors.

The company I used was a care home operator that I used to work for. For this question, the first part of my
answer was dedicated to using both the PESTLE and SWOT tools.

Joseph is a luxurious international  fashion brand and retail chain which was established in  the
UK by Moroccan entrepreneur Joseph Ettedgui and his family in 1972. The headquarters are based in
London but they also have an office in Paris.

The business operated as a family business until 1999 where the Ettegui family decided to sell a majority
of their business shares.

At that time the UK business counted less than 80 employees across corporate and retail.

In 2005, the brand was sold to the Japanese group Onward Kashiyama (“Onward”) and grew from 80
employees to nearly tripled its headcount (in the UK) since.

I joined Joseph (nuclear) HR team just after the acquisition of the Company and left the Company in
2019.

The notion of reward has always been a central question at Joseph.

In this question will outline the main factors

Internal and external factors that inform reward decisions at Joseph

Political factors

Brexit: more than 50% of the Joseph workforce in the UK comes from Europe. Joseph will have to
comply with the new immigration requirement when hiring from the EU. This will lengthen the hiring
time and add administrative burden.
Business tax increases due to heavy government support during Covid-19: Joseph can expect a rise in the
level of business taxes as soon as the economy reopens. This is due to the major financial support
businesses have received from the government in order to face with the impact of the pandemic on their
businesses (employees furloughed instead of being dismissed following the temporary closure or its UK
stores). This will no doubt be another strain on Joseph who will need to seek further support from its
Japanese investors.

Economic factors

The UK’s decision to leave the EU will have a massive impact on our labour cost going forward.
Companies will face a “Talent War” which will inflate salary rates in general. Vacancies will remain
unfilled for longer period than before which will seriously affect trading. Recruiting from the EU will
also be costly as Companies will need to meet the new immigration salary thresholds

Tourism industry severely affected by the pandemic. Joseph international customers are no longer
travelling to the UK. This, will affect Joseph sales with 50% of its “premium” clientele leaving abroad
(on another hand, Joseph online sales have shoot up. This could be an opportunity for Joseph to invest in
their ecommerce business).

The lockdown measures in the UK and France have severely affected the business where more than 50%
of the Joseph profits come from Retail sales. This has severely affected Joseph sales.

Technologic factors

Changes in shopping behaviours (especially during the pandemic) need to force Joseph to
develop/expand their ecommerce business. This is key for the business survival.

Legal factors

Some of the current regulations affecting Joseph in the UK are:

National Minimum /Living Wage legislation: UK Employers are in the obligation to pay their
employees/workers no less than the rates imposed by law.

New age band for the National Leaving Wage will apply from 01/04/21. Employees aged 23 and over
will see their hourly rate increasing to £8.91 /hour. the hospitality and retail industries are heavily
relying on low pay workers and will face a huge increase in their labour cost. This will be a budgeting
issue for Joseph.

IR35 for the private sector: Joseph employs many contractors and consultants. Their employment status
is sometime confusing and unclear. Joseph will need to clarify their situations to avoid important fines.
Clarifying those status will also have a huge financial impact and also affect sourcing.

Equal opportunities legislation including GDPR are and will continue impacting organisations (with
currently 250+ employees). Joseph is directly affected by this legislation.

Environment factors

Sustainability and the impact of manufacturing on the environment is a major point Joseph needs to
think of and included in their brand proposal.

Q1.2 Analyse the particular impact of business drivers and related factors on reward decisions

his really helped me identify the internal and external factors that affected the organisation’s reward policy.

Using PESTLE and SWOT helps you assess areas such as:

 Profit and Loss affecting Affordability

 Is the company expanding or contracting?
 Is your business in a strong market position?
 How is the business functioning in comparison to yours? Are they expanding or contracting?

Can you benchmark your business against competitors in the industry? How is your industry / sector functioning
in terms of Reward?

Example from a Pestle:

Economic

The foremost external economic driver for Company X is the reductions in the social care budgets that mean
local authorities have less money to pay for residential care. That, coupled with increasing living wages and
rising inflation on goods and energy, means that the bottom line is under great threat. This leave less for a
reward budget.
Example from a SWOT:
Weaknesses
 Pay in relation to living wage
 High staff turnover
 Hard to differentiate between staff grades
 Attraction/retention differences across the businesses
 Lack of a longer-term view
 Overtime addiction to top up wages
 We tend to reward effort more than output
 We don’t know how to measure output

Q1.3 Explain the most appropriate ways in which reward intelligence can be gathered and presented

Reward intelligence can be identified and utilised in a number of ways.

In the broader sense, the CIPD produces an annual industry survey into reward management which looks at
information such as pay positioning, pensions and performance related bonuses
Within relevant industries, reward analysis will be conducted and communicated, normally through industry
specific journals .You should split your answer into Internal and External Benchmarking.

Examples you could include are as follows:

Internal Benchmarking:
 Exit interviews
 Employee engagement surveys
 Company reward and salary surveys
 Metrics including retention rates

External Benchmarking:
 Reward surveys
 Salary surveys
 Recruitment agencies regularly collate reward data, and offer it on to clients or customers, possibly for
a price. This will be highly accurate information and can be tailored to your industry and region.
 Market Intelligence
 Sector analysis
 Reward journal articles and reports
 Trade journal articles and reports
 Consultants
• Job advertisements (cheaper, but more time-consuming than using a recruitment agency).

You are also asked how this information should be presented. You need to describe how you would get your
message across to your audience. Think about the following:
 How would CIPD present their research on reward intelligence? (Reports, on their website and at
seminars)
 What type of publication would an academic present their research studies on rewards? (Journal)
 If you were to gather feedback from employees regarding the reward culture in your business, how
could you do that (think SurveyMonkey)

Internal Benchmarking:

 Exit interviews
 Employee engagement surveys
 Company reward and salary surveys
 Metrics including retention rates

External Benchmarking:

 Reward surveys
 Salary surveys
 Recruitment agencies regularly collate reward data, and offer it on to clients or customers, possibly for
a price. This will be highly accurate information and can be tailored to your industry and region.
 Market Intelligence
 Sector analysis
 Reward journal articles and reports
 Trade journal articles and reports
 Consultants
• Job advertisements (cheaper, but more time-consuming than using a recruitment agency).

Checklist: I have written a comprehensive PESTLE to identify internal factors I have written a
comprehensive SWOT to identify external factors I have analysed how business drivers can affect reward
strategies and policies I have given examples of different ways of gathering and presenting reward
intelligence

________________________________

Q2.1 Evaluate the principle of total rewards and its importance to reward strategy.

The first thing you should do is write up a brief explanation of what ‘Total Rewards’ actually means. Then
expand on this, as total reward goes far beyond salaries, as some businesses cannot
afford high salaries, or excessive bonuses. When evaluating the principle and importance of a total rewards
approach, you should be able to write up information that looks outside just pay as a form of reward. For
example:

 Work–life balance
 Development and career opportunities.
 Flexible benefits
 Access to professional and career development
 A challenging role
 Freedom and autonomy
 Opportunity for personal growth
 Recognition of achievements
 Preferred office space or equipment
 Capacity to raise matters of concern
 Involvement in decisions that affect the way work is done
 Administrative support

The CIPD (2015) defines total reward as a concept that covers all aspects of work that employees value, both
tangible and intangible which as wide-reaching workplace implications.
Historically the notion of total reward was limited to financial rewards only. These encompassed elements such
as the base pay, variable pay, share ownership and benefits.

Today, the notion of total reward is a much larger concept

The US Organisation, WorldatWork, has identified 6 separate components of the work experience in addition to
pay and benefits: These are:

 Performance and recognition

 Work Life balance
 Organisation culture
 Employee development and career opportunities
 Business strategy
 Human resources strategy

Under the total reward approach, all aspects of the work experience are recognised and prominence is given not
only to remuneration but also to non-financial rewards.

For example, Joseph offers the below tangible rewards would be:

Basic remuneration

Departmental monthly incentives based on individual performance

Annual incentive based on Company’s performance (percentage based on employee’s annual salary)

The intangible rewards would be:

Flexible working

Access to professional and career development

Opportunity for personal growth

Recognition of achievements

An analysis of various total reward models by Thompson in Total Reward (CIPD, 2002) find 7 approaches to
rewards.

Holistic
Best-fit
Integrative
Strategic
People-centred
Customised
Distinctive
Evolutionary

While private sector employers have tended to be at the for front of the formal development and adoption of
total reward policies, there has been an interest among the public sector.

Advantages
 Helping to attract, retain and motivate employees. 

 Meeting both organisation objectives and employee needs. 

 Enhancing the reputation of an organisation as an employer of choice through its capacity to place a
value on the wider non-financial benefits of working for an organisation. 

 Helping the employer better communicate its employee value proposition. Many employees are
unaware of the costs to the employer of benefits, such as pensions, which can be very substantial. To
overcome this, employers frequently provide individual employees with total reward statements that
emphasise the value not only of basic pay but also the wider benefits package and potentially other
congenial aspects of employment
Drawbacks
A CIPD research (17th ) indicates that employers believe they’re better at integrating financial aspects (pay and
benefits) into a total reward approach than the non-financial aspects.
An area of concern revealed by the research is line manager behaviour, with employers expressing concern at
how well they’ve integrated the behaviour of these staff within a total reward approach. Yet, if line managers
don’t support the organisation’s commitment to total reward (for example, over family-friendly working
patterns) the approach is likely to fail.
Other potential challenges include:
 Some rewards are easier to provide than others. For example, most employees might prefer a desk
located by a window, but office accommodation is a finite and not particularly flexible resource. In
such cases, it would often be very difficult to meet everyone’s needs.
 Attempting to measure or weigh the value of certain reward against one another – particularly if the
aim is to include a numerical or tangible value in total reward statements distributed to employees.
Employees can be confused by too much reward choice.
 The need to educate staff by communicating the value of the reward package and what the strategy
aims to achieve.
 The danger that the organisation defines the total reward offering with no regard to the needs and wants
of its staff.
 The temptation for employers to shift the reward mix from pay to lower-cost benefits and non-financial
rewards.
 Cynicism among some employees that total reward is no more than camouflage for a cost-cutting
strategy.
Furthermore, our book Reward management: alternatives, consequences and contexts notes that there's been a
lack of evidence to suggest that this approach improves employee engagement, productivity or well-being. The
authors flag that this may be about to change though, citing research looking at the positive impact it can have in
recruitment.
However, the concept of total reward is becoming obsolete nowadays (Duncan, 2014). He suggests a
new approach to total rewards: Smart rewards as there is a need for a

Q2.2 Explain the significance of equity, fairness, consistency and transparency as they affect reward
policies and practices. In this section, you should: 1. Identify and explain the importance of equity,
fairness, consistency and transparency in terms of how they should underpin reward policies and
practices. You may illustrate your understanding of these key principles by referring to topical reward
matters.

Break these four down into their own headings.

Equity – this has become more relevant in recent times as businesses have to be legally and socially transparent
when it comes to transparent and fair pay structures. Adams has a theory on this that you might wish to include
(Adams 1965 Theory of Equity)

Fairness - Reward policies should be seen not to discriminate and be achievable. The fairness of how the reward
policy is implemented is the responsibility of HR, to ensure it is available to all,
and to line managers, who should ensure it is implemented fairly.
Consistency - The rewards system should treat everyone fairly, and in a consistent manner.

Transparency - the perception of fairness is subjective, and complex reward systems mean that employees may
feel they are being treated unfairly.
There is a really good case study on the RBS that looks at the subject of transparency, although it is a bit old
now (Srivastav and Pandey, 1995)

Each heading should describe how they affect reward policies and practices making reference to good practice

Q2.3 Assess the contribution of both extrinsic and intrinsic rewards to improving employee
contribution and sustained organisation performance. Refer to academic research and the literature in
this area and illustrate with examples of good practice.
Extrinsic rewards in the form of salary and bonuses will help to attract and retain employees and assist in
improving their performance and reduce discontent short-term.
Intrinsic rewards are more long-term and are non-financial, looking at recognition, praise and responsibility.
The table
below describes the reward framework:

Financial Rewards Non-Financial Rewards

Intrinsic Rewards •Job design and role development
(responsibility, autonomy,
meaningful work, the scope to use
and develop skills)
•Opportunities to achieve and
develop
•Quality of working life
•Work/life balance

Extrinsic Rewards Pay and benefits •Recognition

•Praise
•Feedback

Adapted from Armstrong, M. (2015) Armstrong’s handbook of reward management practice: Improving performance through reward. London, United
Kingdom: Kogan Page.)

This AC requires you to look at academic literature, research and at theory when preparing your answer. You
need to ensure that you can understand the terms ‘intrinsic and extrinsic in terms of reward and what contribution
these make to improving employee performance –how do they motivate the employee to help achieve
organisational objectives

Q2.4 Explain how policy initiatives and practices are implemented.

Explain how reward policy initiatives and practices are implemented in your chosen organisation and give an
account of how reward policies and practices are implemented in their organisation of choice .

Checklist: I have explained the term total rewards I have discussed the importance of total reward in
relation to reward strategy I have explained the significance of equity, fairness, consistency and
transparency and how they affect reward policies and practices. I have explained how policy initiatives
and practices are implemented. I have assessed the contribution of extrinsic and intrinsic rewards to
improving employee contribution and sustained organisation performance.

________________________________

Q3.1 1. Explain the various ways in which line managers contribute to reward decision making.

Line managers play an important part in the context of reward management. Line managers have a crucial role
in coaching employees and providing them with guidance and feedback through
performance management. Such positive feedback helps provide employees with the motivation they need to
keep performing through periods of uncertainty and change. In your answer, you should look at the following:

 What influence a line manager has, and do they always have access to ‘pots’ of money for bonus or
other rewards such as training or promotion.
 Performance reviews - Also known as 360-degree appraisals, these are a popular method of reviewing
the progress of an employee
 Performance-related pay –Performance-related pay is commonly used for manual workers to ensure
there is less of a disparity between them and salaried staff.
 Competency-related pay – Competency-related pay is when employees receive financial incentives for
reaching the next level of competence in their role. It is widely used in the knowledge sector.
 Non-monetary recognition–Non-financial rewards can be typically seen as praise or recognition, but it
can be much more than that.
 Reviewing job roles–Also known as ‘Job evaluation’
 Related-pay banding-When two jobs have similar scores and are placed in the same grade within a
grading structure then they are ‘rated as equivalent’ and must be paid within the same grade band

Checklist: I have explained the various ways in which line managers contribute to reward decision
making. I have discussed Performance reviews, Performance-related pay, Competency-related pay, Non-
monetary recognition, Job evaluation and Related-pay banding.
Note: the assignment must be a report, the question heading below will highlighted in the report as an
evidence to the assessor of covering all points
PART .1 -ASSESS THE CONTEXT OF THE REWARD ENVIRONMENT AND THE KEY
PERSPECTIVES THAT INFORM REWARD DECISIONS. IN THIS SECTION YOU SHOULD:
1. Use an appropriate analysis tool to identify the internal and external factors.
You should use an appropriate tool e.g. SWOT or PESTLE to identify and assess the internal and
external factors that impact on your organisation’s reward policy.
2. Analyse the particular impact of business drivers and related factors on reward decisions.
You should assess the impact of business drivers and other factors that inform reward decisions e.g.
affordability, benchmarking against other organisations, market position, economic outlook etc.
3. Explain the most appropriate ways in which reward intelligence can be gathered and presented.
Give examples of different ways of gathering and presenting reward intelligence.
You should then identify different types of reward intelligence and explain how it is (1) gathered (e.g.
reward and salary surveys, consultants, recruitment agencies, job advertisements, reward journals,
market intelligence, sector analyses), and (2) presented.
PART .2 – EVALUATE THE PRINCIPLE OF TOTAL REWARDS AND ITS IMPORTANCE TO
REWARD STRATEGY. DEMONSTRATE YOUR UNDERSTANDING OF KEY REWARD
PRINCIPLES AND THE IMPLEMENTATION OF REWARD POLICIES AND PRACTICES.
1. Evaluate the principle of total rewards and its importance to reward strategy.
You need to evaluate the principle and importance of a total rewards approach
You can illustrate this by making a case for the benefits of encompassing cutting edge training,
flexible working along with the traditional aspects of pay and benefits within a total reward approach.
2. Explain the significance of equity, fairness, consistency and transparency as they affect reward
policies and practices. In this section, you should: 1. Identify and explain the importance of equity,
fairness, consistency and transparency in terms of how they should underpin reward policies and
practices. You may illustrate your understanding of these key principles by referring to topical reward
matters.
You should explain the significance of equity, fairness, consistency and transparency as they affect
reward policies and practices making reference to good practice e.g. meritocratic application and also
making reference to any relevant legislation e.g. regulation pertaining to anti-discrimination.
You could also illustrate your understanding of the key principles with reference to topical reward
matters e.g. living wage or gender wage gap.
3. Assess the contribution of both extrinsic and intrinsic rewards to improving employee contribution
and sustained organisation performance. Refer to academic research and the literature in this area and
illustrate with examples of good practice.
You should provide an assessment of the contribution of intrinsic and extrinsic rewards to improving
employee contribution and sustained organisation performance. You should refer to academic
research and relevant literature to demonstrate their understanding of the relationships between the
concepts and variables.
4. Explain how policy initiatives and practices are implemented.
You should explain how reward policy initiatives and practices are implemented in your chosen
organisation.
You should give an account of how reward policies and practices are implemented in their
organisation of choice.
PART .3 – DEMONSTRATE YOUR UNDERSTANDING OF THE ROLE OF LINE MANAGERS
IN MAKING REWARD DECISIONS
1. Explain the various ways in which line managers contribute to reward decision making.
You should give examples of the various ways line managers can contribute to reward decision-
making e.g. performance reviews and performance-related pay, non-monetary recognition, reviewing
job roles as they evolve and related-pay banding.