The Hay Group Total Reward Framework

A new way of understanding reward

Reward strategies must be anchored in business reality to be effective. Which means linking it to your business strategy – and the needs of your employees as well as your organisation. Our Total Reward Framework helps you optimise reward, no matter how challenging the conditions.

The issue
Remuneration tends to be one of the worst-managed parts of an organisation’s cost structure. But with 10-70 per cent of total costs wrapped up in it, reward cannot be ignored, particularly in a downturn. To be effective, reward programmes must reflect the needs of the business, now and in the future. Only if they are tied closely to company strategy, business performance and the needs of employees can reward programmes deliver the ROI that is needed in tough times.

The Hay Group Total Reward Framework takes strategy as a starting point – and it focuses on total reward: every financial measure together with non-financial rewards too. It also takes into account the needs of both company and employee: an even, balanced approach ensures the company’s interests are catered for, while ensuring employees are engaged and motivated. This holistic approach is particularly important at a time when costs are under pressure and organisations are, in essence, focused on doing more with less.

Our framework is also tied to a strong implementation plan, ensuring it translates into bottom-line results.

The Hay Group Total Reward Framework

Hay Group can design total remuneration programmes that can help you:

  • align the value of the total reward programmes with individual performance, business performance and work culture
  • provide a competitive and differentiated total reward package, one reflective of the internal and external value of work
  • ensure the external competitiveness of the total reward programme, so that the level and mix of remuneration is positioned against the right comparator groups, at the right levels
  • develop reward programmes that most cost effectively meet the motivational and retention needs of employees
  • ensure employees have buy-in and understand new programmes, which in turn, will increase employee commitment/engagement
  • ensure line managers fully understand the programmes and can lead in implementing them
  • align people costs with business results.

Why Hay Group
At Hay Group, we will strive to understand your business and how designing rewards right can make a difference. Most of all, we ‘know’ people, what motivates them and how to effectively influence them.

Our style is to approach reward from a business and an integrated, not just technical, perspective. We blend the financial, organisational and behavioural aspects of reward to create tailored programmes that fit the business strategy as well as HR goals. We also make use of proven diagnostic and survey methodologies and our database of rewards offered in businesses across the world.

The result is a total remuneration programme or programmes (base salary plus short-term incentives, long-term incentives and the value of benefits programmes) that ensures your organisation is providing the appropriate amount of remuneration, in the right ways.

Hay Group’s approach
Hay Group works closely with key decision makers across your business, including financial professionals, to understand your business strategy, business model, key performance indicators (KPIs), employee demographics and work culture. From there we are better equipped to review and redevelop your reward architecture. We will:

  • examine your current remuneration programme and gauge the extent that it aligns with the business strategy, the HR strategy and the reward strategy
  • understand the economics and business priorities of your organisation
  • understand the employee demographics and potentially different needs of different employee groups
  • conduct employee surveys to understand which reward programme features deliver the most value to them, and
  • look at the messages that your reward programme is giving around each element and determine the extent that they align with reward strategy.

From this we then develop base salary plans that are aligned with your business requirements and reward strategy. We also model outcomes and costs of alternative plan designs to help you see the bigger picture and explain the potential cost and accounting implications of our recommended strategy. We will then show you how this compares to other organisations and offer insights into why different types of plans tend to be used by different organisations.

Finally, we can provide you with the benefit of our experience and expertise in implementing and communicating the new salary programme: many well designed programmes do not provide a ‘return on investment’ due to poor communications or implementation.

Hay Group in action
Hay Group has helped develop a reward architecture for US store chain Family Dollar. Read our case study.

Find out more
If you would like to discuss how we can help you develop a reward architecture that fits your business strategy, please contact us.