REWARD STRATEGY

Relationship of HR with business strategy

It makes perfect sense to say that the Human Resource strategy should be aligned to the business strategy i.e. once the objectives of the business have been decided the human resource strategy should be developed and the human resource strategy should help the company meet the business objectives.

For example; say a business objective was to set up and launch a customer service call centre, the Human Resource Strategy would include the recruitment of experienced call centre staff, training of call centre staff, and establishment of a competitive salary structure and reward strategy for call centre staff.   It is easy to see in this example how if the human resource strategy was agreed in isolation to the business strategy, then the human resources department may not be working towards the achievement of the business objectives.  

What is meant by a reward strategy? Usually it is a combination of the policy, process and practices of how people are paid in order to achieve company goals. The current most important reward strategies are as follows:

• Performance Related Pay
• Competence Related Pay
• Skill Based Pay
• Team Pay
• Broad banding