Main navigation

Tangible Rewards

Tangible rewards are usually easier to benchmark than the other Engaged Performance® factors, because they can be valued in terms of both their features (e.g. accrual rate), and their monetary value. There is also a long history in benchmarking tangible rewards, particularly salary and benefits.

This Toolkit therefore provides more in-depth advice on Tangible Rewards than on the other factors, and this information divided into the sub-factors:

• Salary
• Benefits
• Incentives
• Recognition
• Fairness of Reward

See the elements of Tangible Rewards, and their definitions.

Back to Review of Progress

Tangible Rewards - Salary

Actions

• Assess:
  • What are your past and current policies around pay?
  • How does pay progression work?
  • What is your actual pay practice in terms of pay levels, salary ranges, progression rules and links to performance or contribution?
• Benchmark:
  • How does your pay policy and practice compare to the external market?
  • Who do you compare yourselves against?

Guidance on Salary Benchmarking (pdf, 63Kb)

Information about online salary benchmarking using HayPayNet.

• Consider changing:
  • If policy is inconsistent with strategy;
  • If practice is inconsistent with policy;
  • If policy is inconsistent with comparator market.

Examples:

A national charity had a base salary policy positioned at the market median, but was still having retention problems. Research against market practice found that while their policy was competitive, actual pay practice was considerably lower.

An organisation was having trouble recruiting and retaining staff, despite having an upper-quartile pay policy. On examination, Hay Group found that while actual salaries were consistent with the policy, the policy was positioned around 15% below the stated market position - placing actual pay below market median, and therefore making it difficult to recruit the appropriate calibre of employee.

Case Studies

Agenda for Change Early Implementer Sites [Department of Health website]

Amalgamating Pay Structures at a University (pdf, 30Kb)

Implementing Single Status at Essex County Council (pdf, 33Kb)

Pay Review at Stratford-on-Avon District Council (pdf, 80Kb)

Further Resources

Back to Top

Tangible Rewards - Benefits

Benefits typically include pension, death in service/disability provisions, car or car allowance, holidays and staff restaurants. Childcare vouchers and Home Computer equipment are growing in use as are voluntary benefits. Provision of health benefits such as medical insurance is not consistent with wider Government policy on the NHS. However, some public sector organisations do offer such benefits, either at certain levels of the organisation or as part of a voluntary benefits scheme. This mainly occurs in non-departmental public bodies and local authorities.

Actions

• Assess:
  • What benefits do you currently offer, to whom and at what cost?
  • To what degree to employees value each benefit?
  • What is the take-up level of each benefit?
  • Are benefit costs affordable and sustainable?
  • To what degree is benefit provision standardised across the organisation?
  • What is the rationale for any differences in benefit provision?
  • Does the benefits package align with HR and organisational strategy?
  • Who is responsible for the design, control and administration of benefits?
  • Do you offer flexible or voluntary benefits?
• Benchmark:
  • How does your benefits policy and practice compare to the external market?
  • Who do you compare yourselves against?
• Consider changing:
  • If policy is inconsistent with strategy;
  • If practice is inconsistent with policy;
  • If policy is inconsistent with comparator market
  • If your analysis shows you could get better use of your benefits budget.

Examples

• Many private sector businesses are closing their defined benefit pension schemes, making public service schemes much more competitive - are your employees aware of this?
• Employees can now receive £55 per week of Childcare Vouchers free of tax and NI - have you reviewed your Childcare provision to account for this change (effective 6 April 2006)?

Back to Top

Tangible Rewards - Financial Incentives

Actions

• Assess:
  • What is your strategy/philosophy around bonus/incentive payments?
  • What bonus/incentive schemes do you currently operate?
  • Who is eligible to participate?
  • What is the target payment (£ and %)?
  • What is the maximum payment (£ and %)?
  • What is the actual payment history (£ and %)?
  • How often are payments made?
• Benchmark:
  • How do your scheme/s compare against the external market?
  • Who do you compare yourselves against?
• Consider changing:
  • If target/maximum payments are below market practice
  • If actual payments are below market practice (subject to relative organisational performance)
  • If current schemes are inconsistent with organisational strategy/philosophy
  • If employee perceptions are adverse

Examples

• A large public-sector organisation offered finance staff project completion bonuses of up to 15% of base salary to key individuals who had been seconded from other departments. Most remained with the organisation until the project (the installation of the new SAP accounting system) had been completed.

Case Study

NHS Team Pay