Why Reward Isn’t The Answer?



There’s no disputing that money can be used to attract, engage and retain talent however, far too many organisations see it as the first and only answer to resolve talent related pain points. I recently spoke with a People Director who described reward strategies as “putting a plaster over an organisations wounds”. Reward is an important element of any operating model but if treated as a single workstream then it is much less effective.

The purpose of this blog is to understand what falls under a reward strategy, my opinions on why reward doesn’t always work in terms of attraction, engagement and retention. Then attention will focus on some of the alternatives to reward.

I still don’t understand why when an organisations attrition increases, there’s always someone internally saying “let’s do a pay and gradient review” – on what basis can you make that assumption?


What falls under a reward strategy?

One of the key issues with reward is that that many of us understand it to be how much we get paid or what pension we will receive. However, there’s many other elements as described by the CIPD below…

Salary, flexible benefits, access to professional and career development, freedom and autonomy, opportunity for personal growth, recognition of achievements, preferred office space or equipment, capacity to raise matters of concern, involvement in decisions that affect the way work is done, flexible working hours, opportunities for home working, administrative support (CIPD, 2018).

Reward is split up in to two sections, strategic and total:

  • Strategic Reward – this relates to the long term strategic reward policies and processes that matches the goals of both the individual employees and the organisation
  • Total Reward – Goes beyond pay and benefits, looks at things such as: development opportunities, working environment etc.


Why it doesn’t work?

Short term improvements at a higher cost – When increasing someone’s salary it is likely that within three to six months, that person will have got used to receiving the new amount. Therefore, you’re back at square one with a disengaged employee but your costs are higher!

Weak Unique Selling Point (USP) – Imagine that you’re sat in a recruitment process and one of the key selling points for the role is how much that business are going to pay you. We all know how important it is to keep costs down therefore, if a business are having to pay more than other organisations attract talent, then what does that tell you about the role, culture and organisation?

Not necessarily going to improve performance, customer service etc – Just because you’ve retained a member of your team through improved reward doesn’t mean that they are going to perform well. In fact, it’s more than likely you’ll be paying them more to get the same/less out of them – remember, not all attrition is bad attrition.


Alternatives/ways to improve reward strategies?

Engagement – gain collective feedback, empower your employees – A longer term and more sustainable approach to engaging and retaining your employees is to empower them – you may even want to “give them a voice”. Through doing so you’ll form a culture that they can relate to, a clear business purpose and a set of values that mean people enjoy coming to work.

Recognition – No matter how big or small your organisation is, everyone can recognise good work. It’s something so simple, that many of us do so badly – it can even just be saying thanks! Many organisations have started to implement happiness wheels, recognition cards e.g. thank you, well done etc and some are just saying happy birthday! This touches on total reward.

Wellbeing – It’s the hot topic in 2018 however, many of us can still improve the physical and mental wellbeing support that we offer to our employees. Rather than just paying them more then why do we not understand their needs e.g. SMART working strategies. This also touches on total reward.



  • Reward is a key element of any operating model however, it’s not as effective when treated in silo or used to cure pain points
  • Not all attrition is bad attrition – don’t pay someone more to do the same job
  • Develop your unique EVP (employee/employer value proposition), do not let how much you pay people be one of your key elements – it’s not sustainable and anyone can do that


As always keen to get people’s thoughts on this and happy to answer any questions.

Harry Wright

Rencai Group

Client Relationship and Delivery Consultant

07341 662232

[email protected]