Increasing the effectiveness of reward management: an evidence‐based approach

Abstract

PurposeThis paper seeks to explore the reasons why many organisations do not evaluate the effectiveness of their reward policies and practices, examines the approaches used by those organizations which do evaluate, and develops a model of evidence‐based reward management which describes how evaluation can take place.Design/methodology/approachThe paper draws on a study of why organisations do or do not evaluate reward and an examination of what organizations taking evaluation seriously were doing about it. The study was based on a survey of 173 reward and HR practitioners and 13 case studies.FindingsThe survey found that only 46 per cent of respondents carried out a full evaluation. Other surveys have established that an even lower proportion evaluated. Those organisations which evaluate reward do so because they recognise that it is necessary to obtain value for money from their considerable expenditure on pay. Those who do not evaluate offer a number of reasons, but the most important was lack of resources or time. It was established that while an evidence‐based approach was desirable there was no set pattern of conducting an evaluation.Practical implicationsInformation about the evaluation practices of the case study organisations and the concept of evidence‐based reward management as an approach to evaluation provide guidance to practitioners on how they can measure the effectiveness of their reward policies and practices.Originality/valueThe paper extends the pioneering research of Corby et al. to develop new insights into the process of reward evaluation.