Armstrong's Handbook of Reward Management Practice: Improving Performance through Reward / Edition 3

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Aimed at both HR practitioners involved in employee motivation and students who need to understand the importance of reward and how it can be successfully applied across organizations, this edition contains new research conducted by E-Reward, as well as brand new case studies of international companies that are effectively using incentives to improve performance such as global delivery service DHL, international life insurance and pensions Aegon, mobile phone manufacturer DGS International, building materials industry leader, Cemex and British Telecom.

With Learning Outcomes and Key Concepts highlighted in each chapter, as well as comprehensive support material for instructors and students, this new edition is especially classroom friendly.  Four new chapters explore talent management and incentives, the ethical approach to compensation and performance management, evidence-based reward management and how to manage reward risk.

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Editorial Reviews

From the Publisher
Praise for the previous edition:

"Provides guidance on approaches to the development and management of reward systems that contribute to improving organizational, team, and individual performance while respecting and catering for the needs of employees." —Journal of Economic Literature

"[I]ncludes key theories and best practices, and is based in both lessons learned from academic research and numerous reward surveys and case studies. The concept is simple: reward delivers performance. The author gives plenty of straight-forward guidance for how to make that simple concept work." —Book News Inc.
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Product Details

  • ISBN-13: 9780749455347
  • Publisher: Kogan Page, Ltd.
  • Publication date: 4/1/2010
  • Edition description: Third Edition
  • Edition number: 3
  • Pages: 560
  • Product dimensions: 6.70 (w) x 9.40 (h) x 1.30 (d)

Meet the Author

Michael Armstrong is a former Chief Examiner of the Chartered Institute of Personnel and Development, joint managing partner of e-reward and an independent management consultant. He has sold over 500,000 books on the subject of HRM.

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Table of Contents


Part One Essentials of reward and performance management 

01 An overview of reward management 
Reward management defined 
Aims of reward management 
Reward philosophy
Guiding principles
The reward system 
Reward systems in action 
Contextual factors affecting reward 
Developments in reward management 

02 Performance management 
Characteristics of performance management 
Principles of performance management 
The performance management cycle 
Performance and development agreements 
Performance planning 
Managing performance throughout the year 
Reviewing performance 
Assessing performance 
Recording the performance agreement and review 
Web-enabled performance management 
Performance management as a rewarding process 
Impact of performance management on performance 
Line managers and performance management 
Case studies

03 Performance and reward 
The meaning of performance 
Influences on performance 
How does reward impact on performance? 
Impact of reward on organizational performance 

04 Motivation and reward 
The process of motivation 
Types of motivation
Instrumentality theory 
Reinforcement theory 
Content (needs) theory 
Process theory 
How motivation theories affect reward management 

05 Engagement and reward 
Why engagement is important 
The factors that influence engagement 
Enhancing engagement 
Developing engagement policies through reward 

06 Talent management and reward 
Talent management 
The contribution of reward and performance management to talent management 

07 Financial rewards 
Incentives and rewards 
The theoretical framework 
The role of money 
Views about the importance of pay 
Research on the effectiveness of financial rewards 
Arguments for and against financial rewards 
Criteria for effectiveness 

08 Non-financial rewards 
The significance of non-financial rewards 
Types of non-financial rewards 
Individual extrinsic rewards
Individual intrinsic rewards 
Collective extrinsic rewards
Collective intrinsic rewards

09 Total rewards 
Total rewards defined 
The elements of total rewards 
The significance of total rewards 
Benefits of total rewards 
Models of total rewards 
Introducing total rewards 
Total rewards in practice 

10 International reward 
The international scene 
International reward strategy 
Guiding principles for international reward
Rewards for expatriates 

11 The ethical approach to reward and performance management 
Ethical decisions in reward and performance management 
Why is an ethical approach desirable? 
Fairness?139 Treating people justly 
Resolving ethical dilemmas 
The ethical role of reward professionals 
An ethical code of practice for reward and performance management 

12 Strategic reward 
Strategic reward defined
The characteristics of strategic reward 
Critical evaluation of the concept of strategic reward 
Reward strategy 
Case studies 

Part Two Base pay management 

13 Introduction to base pay management 
Base pay 
Base pay management
Factors affecting pay levels - the conceptual framework 
Pay determination within organizations 
Summary of factors affecting pay levels 
Managing pay 
Base pay management and performance

14 Job evaluation
Job evaluation defined 
Aims of job evaluation 
Achieving the aims
Formal job evaluation 
Informal job evaluation 
Analytical job evaluation schemes 
Non-analytical schemes
Market pricing 
Job analysis for job evaluation 
Computer-aided job evaluation 
Choice of approach to job evaluation 
Developing a point-factor job evaluation scheme 
Implement job evaluation 
Ensuring that the scheme is unbiased 

15 Market rate analysis 
Aims of market analysis
The concept of a market rate
Job matching
Use of benchmark jobs 
Sources of market data 
Interpreting and presenting market rate data 
Using survey data 

16 Grade and pay structures 
Grade structures
Pay structures 
Guiding principles for grade and pay structures 
Multi-graded structures 
Broad-graded structures 
Broad-banded structures 
Career-family structures 
Job-family structures 
Combined career-/job-family and broad-banded structures
Pay spines
Unstructured pay systems 
Spot rates
Individual job grades 
Choice of grade and pay structures 
Developing a grade and pay structure 
Career-family structure design 
Minimizing bias in grade and pay structure design 

17 Equal pay 
Reasons for unequal pay
The Equality Act 2010 
Defending an equal pay claim
Achieving equal pay
Risk assessment

Part Three Rewarding and recognizing performance

18 Merit pay 
Characteristics of merit pay
Method of operation 
Performance-related pay 
Competency-related pay 
Contribution-related pay 
Overall conclusions on merit pay 
Developing merit pay schemes 

19 Bonus schemes
Bonus schemes defined 
Aims of bonus schemes 
Rationale for bonus schemes 
Criteria for a bonus scheme 
Types of scheme
Designing a bonus scheme 
Introducing a bonus scheme
Earn-back pay
Bonus schemes and performance 

20 Team pay
Team pay defined 
Aim of team pay 
Rationale for team pay 
How team pay works 
Requirements for team pay 
Advantages and disadvantages of team pay 
Developing team pay
NHS case study 

21 Rewarding for business performance 
Types of schemes 
Share ownership schemes 
Save-as-you-earn schemes 

22 Recognition
Recognition schemes defined
Benefits of recognition schemes 
Principles of recognition
Types of recognition
Examples of non-cash awards
Designing a recognition scheme 
Examples of recognition schemes 

Part Four Rewarding special groups 

23 Executive reward 
Executive pay levels 
Factors affecting the level and nature of executive rewards 
Why has executive pay grown so much?
Corporate governance and executive remuneration 
The elements of executive remuneration

24 Rewarding sales and customer service staff 
Rewarding sales representatives 
Rewarding customer service staff 

25 Rewarding knowledge workers 
What motivates knowledge workers? 
Approaches to rewarding knowledge workers 

26 Rewarding manual workers 
Factors affecting the pay of manual workers 
Time rates 
Pay structures
Incentive schemes for manual workers
Payment by results schemes 
Collective schemes 
Summary of schemes 
Single status and harmonization 

Part 5 Employee benefits 

27 Employee pensions and benefits 
Rationale for employee benefits 
Employee benefit strategies and policies 
Types of benefit
 Incidence of benefits
Choice of benefits 
Administering employee benefits
Total reward statements 

28 Flexible benefits 
Reasons for introducing flexible benefits
Types of flexible benefits schemes 
Introducing flexible benefits 

Part Six The practice of reward management 

29 Evidence-based reward management 
Evidence-based management
Evidence-based reward management 
Reviewing reward 
Measuring reward
Evaluating reward 

30 Developing reward systems 
The task of developing and implementing reward systems 
Objective setting
The process of development and implementation 
The development and implementation programme 
Advice from practitioners (e-reward)

31 Managing reward systems 
Reward policies 
Controlling reward
Monitoring and evaluating reward policies and practices 
Conducting pay reviews 
General reviews
Individual reviews
Reward procedures
The use of computers in reward management 
Communicating to employees

32 Managing reward risk 
Risk management
Reward management risks 
The risk management process 

33 Responsibility for reward 
The role of the reward professional 
Role of line managers  
Using reward consultants


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