Reward Heads
Using our heads to solve your Reward challenges.
Organisation design and reward are two sides of the same coin: OD defines how work is structured and value is created, and reward signals what work and behaviour are valued and how.
Below is a simple end-to-end view and how reward should plug into each stage.
1. Clarify strategy and outcomes
Typical OD step:
- Define business strategy, critical goals and value proposition.
- Identify what “good” looks like (growth, efficiency, quality, innovation, customer outcomes, etc).
Reward link:
- Clarify reward philosophy (market position, pay-for-performance vs pay-for-role, internal equity vs flexibility) so it is consistent with strategy. We always say start with the reward philosophy - it is the 'Leeds or Manchester' question that we need to answer before we can figure out the journey.
- Decide which outcomes will be reinforced through financial means like pay and bonus, and which through non-financial recognition (for example, customer metrics vs innovation, team vs individual). This is our piece where we talk to the Exec about what each element of reward is for, eg pay is for doing what is on the JD, bonus is for above and beyond.
Example:
A growth/innovation strategy might favour more variable pay, differentiated bonuses for high impact roles and strong recognition for experimentation
A cost-leadership strategy might emphasise tight salary bands, productivity metrics and team-based profit sharing.
2. Diagnose current organisation
Typical OD step:
- Assess current structure, roles, spans of control, decision rights, processes and culture.
- Identify pain points: duplication, bottlenecks, unclear accountability, silos, talent gaps.
Reward link:
- Review existing pay structures, job architecture, bonus schemes and recognition against these pain points.
- Look for misalignment, such as:
- Paying similarly for roles with very different accountabilities or business impact.
- Incentives that drive local optimisation (e.g. sales volume) at the expense of end-to-end outcomes (e.g. margin, customer satisfaction).
- Benefits that don't match workforce profile or EVP.
Insight: Diagnosis often shows where reward is inadvertently propping up a poor design (e.g. paying for on calls and antisocial hours instead of fixing workload/rostering, retention bonuses instead of addressing career paths).
3. Design the future organisational model
Typical OD step:
- Define design principles (customer-centric, lean, agile, global vs local, etc).
- Choose structural options (functional, divisional, matrix, networked); redesign workflows, interfaces and decision rights.
- Identify critical roles, capabilities and talent segments.
Reward link:
- Build or refine job architecture aligned to the new design: job families, levels, career paths, and evaluation methodology.
- Differentiate reward according to business-critical segments (for example, key revenue generators, scarce digital roles, pivotal operational leaders).
- Align performance measures and incentive logic with the new value-creation model:
- If you move from product silos to end-to-end value streams, rebalance from product P&L bonuses to cross-functional or team-based measures.
- If you increase empowerment and decentralisation, shift to more locally controlled recognition and possibly profit-sharing.
Example: Moving to an agile product model typically drives: broader job bands, team-based variable pay, and recognition for collaboration and customer outcomes rather than individual output alone.
4. Detail roles, capabilities and governance
Typical OD step:
- Write role profiles, define decision rights (RACI), interfaces and governance forums.
- Specify capability requirements and career paths.
Reward link:
- Use job evaluation to place roles into appropriate grades/bands; check internal relativities so new reporting lines and spans make sense from a pay perspective.
- Calibrate pay ranges, allowances and variable opportunity by level and job family.
- Ensure performance management is consistent with the way work is done (for example, shared goals where accountability is shared, leading indicators for long-cycle work).
- Build clear reward propositions around key career paths (e.g. technical vs managerial tracks) so progression in the new design feels real and is properly recognised.
5. Plan transition and change
Typical OD step:
- Develop implementation roadmap (phased moves, TUPE/consultation, redeployment).
- Manage people impacts: redundancy, reskilling, communication.
Reward link:
- Design transition rules for pay: red-circling, pay protection, treatment of bonuses and allowances, handling of legacy schemes.
- Harmonise where necessary: consolidate overlapping schemes, rationalise titles and bands, migrate people into the new structures.
- Use targeted incentives or recognition to support critical parts of the transition (e.g. retention awards for key talent through a difficult change; one-off payments for transition workload where appropriate).
- Communicate clearly how and why reward is changing, using simple narratives that connect “new organisation → new expectations → new rewards”.
6. Embed, monitor and refine
Typical OD step:
- Track whether the new design delivers intended business outcomes.
- Adjust structure, processes or capability as needed.
Reward link:
- Monitor pay and reward KPIs: pay equity, market competitiveness, differentiation, cost of workforce, link between performance and reward, engagement with reward offering.
- Test whether reward is driving the right behaviours in the new design (for example, collaboration, end-to-end ownership, customer focus) and adjust metrics or weightings where it is not.
- Keep governance tight: regular review of grades, ranges and incentive plans as strategy or design evolves.
