the theoretical basis of performance-related pay (PRP) as a reward strategy

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Theory of reward Strategy

Implicit in the concept of a reward strategy , is the combination of business elements . Reward strategy involves the application of reward philosophy , the market positioning , the pay structure , and the progression rules applicable to the organization . According to Kessler (2003 : 67 , all these are parts of the rearward strategy and are joined together as a mutual way of supporting the reward system . On the other hand , the reward strategy may also be required to give its support to the

organization 's strategy that may have derived it . Other characteristics of the reward strategy may include proper integration with the practices and policies of the HR . HR practices and performances include development and training , performance management career progression among others

There may also be a consideration on the culture adopted by the organization and individual 's behavior . The organization should inquire on the potential of each person to get to a clear direction through the pay strategy . This means that the reward strategy put in place should be able to motivate individual persons and as a result improve the overall performance of the organization

Any business that wants to pursue an innovative organizational strategy should encourage collaborative behavior , risk taking and creativity . To ensure that such behaviors are reinforced , a company may choose a mixture of individual and collective forms of rewards which will mainly concentrate on the achievement of medium term performance , that will have the support of jobs that are...