Human resource management practice I also available by michael armstrong

Part 

6

  Performance and Reward

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A grade structure consists of a sequence or 

hierarchy of grades, bands or levels into which 

groups of jobs that are broadly comparable in size 

are placed. A grade structure becomes a pay 

structure when pay ranges, brackets or scales are 

attached to each grade, band or level. The main 

types of grade and pay structures are narrow-

graded, broad-graded, broad-banded and pay  

spines.

Pay progression

Pay progression takes place when base pay 

advances through pay ranges or brackets in a grade 

and pay structure, or through promotions or 

upgradings.

Contingent pay

Contingent pay can be related to individual merit or 

service or to team or organizational performance or  

a combination of these.

For salary earners, individual contingent pay can 

take the form of consolidated increases to base pay 

that provide for pay progression, or cash bonuses  

(or both). Wage earners may receive unconsolidated 

cash payments, in addition to their base pay, through 

an incentive scheme.

Team pay

Team pay links payments to members of a formally 

established team to the performance of that team. 

This is a popular form of reward – the 2009 e-reward 

reward survey found that 59 per cent of respondents 

had such schemes.

Pay for organizational performance

The provision of financial rewards that are related to 

business or organizational performance (sometimes 

known as ‘company-wide’ or ‘factory-wide’ 

schemes). They include profit-sharing, share 

schemes and gain-sharing.

Recognition schemes

Recognition schemes as part of a total reward package 

enable appreciation to be shown to individuals for 

their achievements, informally on a day-to day basis 

or through formal recognition arrangements.

Employee benefits

Employee benefits consist of arrangements made by 

employers for their employees that enhance the 

latter’s well-being. They are provided in addition to 

pay and form important parts of the total reward 

package.

Evaluating reward

Reward evaluation uses information obtained from 

reward reviews and reward measurements to assess 

the level of effectiveness achieved by existing or 

new reward policies and practices.

Administering reward management

The administration of reward management is 

conducted through three main activities: base pay 

management through compa-ratio analysis, 

conducting general pay reviews and conducting 

individual pay reviews.

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