(Solution) Assessment ID / 534_7HR03_24_01 7HR03 Strategic reward management

Solution

Question 1 (AC 1.4) -1,012 Words

The Reward Strategy of Riyard Air

Riyadh Air’s reward strategy involves competitive compensation, performance-based incentives and comprehensive benefits to attract and retain talent (Riyadh Air, 2025). It blends fixed pay structures with variable bonuses to ensure that employee performance aligns with the goals of the organisation. In addition, the airline provides allowances, travel benefits and career development opportunities. Examples of non-financial rewards include recognition programs, flexible work arrangements and employee wellbeing initiatives. The purpose of this strategy is to increase employees’ engagement, motivation, and job satisfaction (CIPD, 2024). From the reviews available of literature, there is a direct relationship of the reward strategy offered by an organisation. In particular, by offering total rewards, the employees are touched in all angles hence increasing their performance as their employees feel facilitated and supported.

Evaluating the Effectiveness of Riyard Air’s Reward Strategy

There are several ways in which Riyadh Air’s reward strategy is effective. Because of the competitive salary structure, employees are rewarded appropriately, and turnover decreases as job satisfaction increases (Korneeva et al., 2021). In the aviation industry, where talent shortages can arise, competitive pay is a key driver of retention. Moreover, the performance-based incentives motivate high performance culture through rewarding of employees for achieving and exceeding targets (Gadsden et al., 2021). This approach ties the employees’ efforts towards achieving organisational goals, resulting in higher productivity and employee engagement. Financial incentives such as bonuses also encourage motivation, especially in sales and operational roles (Lin et al., 2022). Travel benefits, which are nonmonetary rewards, are a great retention tool because employees get the chance to have access to unique perks that are sometimes not available in many industries. According to Aschenbrücker & Kretschmer (2022), this contributes to employee feeling of belonging and loyalty to the airline. In addition, career development programs offer structured career paths for employees to grow within the company, providing a higher chance that employees are going to stay with the company for long (Zhao et al., 2022). Through flexible work arrangements and health benefits, Riyadh Air’s wellbeing initiatives increase job satisfaction and reduce work-related stress. These factors help to increase engagement, reduce absenteeism, and improve overall productivity (Korneeva et al., 2021).

Despite its strengths, Riyadh Air’s reward strategy has few limitations that could hinder its effectiveness. First, even though salaries are competitive, they may not take into account the rising living costs, making them ineffective particularly in places facing economic inflation. Edwards et al. (2023) explain that if salary adjustments are not keeping pace with market conditions, employees can feel financial pressure resulting in dissatisfaction, and possibly turnover. Furthermore, while performance-based incentives can be great motivators for some, they can also serve to create unhealthy pressure particularly in customer-facing and operational roles where performance targets are rigid (Nordgren Selar et al., 2023). Such pressure can cause stress, burnout and diminish job satisfaction, which can lead to negative impacts in the overall retention rates. Another limitation is the lack of flexibility in benefits. Travel perks are valuable, but not everyone will benefit from them, especially those with family obligations or those who would rather opt for an entirely different financial incentive (Edmans et al., 2024). Employees, without the option to tailor the benefits offered to meet their specific personal needs, may feel that the reward system is not suitable for them. Furthermore, with no structured financial well-being programs, like housing or child care support, employees can be vulnerable to external economic pressures, impacting the overall engagement and commitment (Edwards et al., 2023).

Recommendations to Enhance Attraction and Retention of Employees

The following are ways in which Riyadh Air can revise its reward strategy to more effectively attract and retain employees

Introduce Flexible Compensation and Benefits

In order for the Riyadh Air to be more attractive to potential employers, the company…………..

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