Summary and Implications

As we move into the 21st century and face a diverse and changing labor market, continuous global transformation, an increasingly fast work pace, mounting technological enhancements and demands, and a shift away from bureaucratic work structures, organizational rewards systems must have the ability to meet these challenges and enhance organizational success and achievement. This chapter has addressed several of the components needed to meet these demands, as follows.

• Move from a strict compensation-only viewpoint to a total rewards philosophy, including integrating learning opportunities and job design. Learning opportunities allow employees to broaden their skill and knowledge base, thereby increasing employees' internal mobility and external marketability. Job design refers to the dynamic makeup of positions and job assignments and is characterized by high levels of autonomy, skill variety, work significance, and so on.

• Shift the focus to include both strategy and execution. This focus should include a rewards system that is both strategic in nature (i.e., the system is in alignment with, and feeds into, organization strategy and goals) and reflective of sound compensation design (i.e., properly designed, implemented, administered, and evaluated).

• Integrate reward systems with organizational learning systems so that the development, storage, and dissemination of compensation system knowledge are an integral part of the organization and are rewarded accordingly.

• Manage equity perceptions by shifting the focus from a job-based-only approach to a dual job-based and person-based method. This allows organizations to assess and address both internal and external equity issues while enhancing employees' perceptions of fairness and proper compensation levels.

• Revisit public sector rewards system design and enhance their effectiveness by implementing contemporary compensation practices, educating employees and line management about pay practices, equity issues, and so on; implementing skill-based, knowledge-based, and bonus-driven pay systems; and ensuring that a system of supports is in place to make certain these changes are successful.

• Extend innovative reward systems to new business environments by implementing performance-based pay systems into private businesses, public sector organizations, and nonprofit agencies, and shift away from seniority-driven rewards systems.

To assist professionals in determining if an organization's reward system is ready for the unique challenges of the 21st century, a comprehensive checklist may be found in Table 8-1.