Reward Strategy Toolkit Why it is important for NHS organisations?

1. Reward Strategy ToolkitWhy it is important for NHS organisations?

2. Why the organisation needs a Reward Strategy Having a reward strategy is important for a number of reasons, including: NHS organisations spend up to 70 percent of their annual budgets on staffing Both the NHS Pension Scheme and the terms and conditions package are among the most favourable on offer to UK employees In some cases, over 20 percent of NHS organisations’ budgets are spent on conditions of service payments and non-pay benefits There is evidence that employees throughout NHS organisations do not understand or appreciate the true value of the employment package they are offered.

3. Why the organisation needs a Reward Strategy Adopting a total reward approach will: • provide us with an opportunity to better communicate the current employment package • improve awareness of its value • improve employee engagement • improve organisational performance.

4. Why the organisation needs a Reward Strategy Employment deal - It would present us with an opportunity to demonstrate that, despite pay restraint and possible changes to pension contributions and subsequent benefits, we continue to offer a very positive employment deal. A total reward approach would also allow us to differentiate ourselves from other employers by framing our employment offering in ways that are relevant to our employees. By having a total reward strategy it allows us to communicate the value of both ‘centrally determined’ and ‘local’ elements of the employment proposition.

5. Deciding on a Total Reward approach Rewards should support alignment between staff behaviours and the values of the organisation. Reward policies also need to be well-integrated with rest of the HR strategy and with each other, so as to deliver a coherent, consistent message to staff about what we as the employer value and reward. Failing to do this will result in staff receiving inconsistent and ineffective messages.

6. Deciding on a Total Reward approach While there is a national framework of terms and conditions for employees within the NHS (Agenda for Change), this does not preclude the need for local employer reward strategies, so as to: Tailor rewards to suit your own specific local needs and flex and improve their application and implementation in the local context of each employer. Use local flexibilities available within the national agreements, which have recently been expanded for Agenda for Change staff under the amendments agreed to the national terms and conditions. (NHS Employers: Agenda for Change – amendments agreed to national terms and conditions.)

7. Ensuring an effective implementation An effective reward strategy can’t just be a statement of senior management views or an impossible wish list with no basis in operating reality. It needs: • to be established using effective programmes and designs • it has to be well communicated and supported • it needs high levels of involvement from staff and managers.

8. Ensuring an effective implementation Recent research has highlighted that a majority of employers within the NHS: do not currently have a reward strategy, primarily because of a lack of relevant knowledge and expertise, but do have plans to develop one in the future (NHS Employers' Reward Survey results) believe that their employees don't fully understand or value the true worth of their total rewards and employment package, reducing its impact and return on the reward investment (NHS Employers Briefing 83: Total Reward in the NHS) think that pay and rewards could be used more effectively to support their service and financial goals and provide a more compelling employment offer (FTN Survey, Optimising NHS Pay, Terms and Conditions).

9. In summary The NHS Employers Reward Strategy Toolkit will enable us to start to develop and practice a more strategic approach to reward. It is essential that sufficient priority, time and resources are devoted to developing and implementing a reward strategy.