Solution

1.0 Question 1: Components of Reward Strategy; Vertically align with organisation strategy and horizontal with other people practices within an organisation

1.1 Introduction

The vertical alignment is identified as a strong linkage required between the overall vision of the organisation which is held in the minds of senior executives. This is also aligned in the aims, objectives and underlying philosophy of organisation strategy of people management (Munkholm & Rubin, 2020). Conversely, horizontal is noted as achieving coherence and consistent strategy in management of people permeating the overall activities of the HR function and organisational functional areas (DPG, 2019). In rewards strategy, vertical integration include alignment of employees reward approaches with corporate goals. This is with horizontal integration aligning them to the broader people policies (CIPD, 2023). Hence, in this section, a discussion on components of a reward strategy is provided with an evaluation of  vertical alignment with organisation strategy and horizontally with people practices.

1.2 Component 1- Salary in form of Cash Rewards

This is a component of a reward strategy which include a form of payment accepted by majority of the employees. The cash rewards can be in the form of base salary or fixed salary for every role or performance-linked incentives provided in a short and long-term plans. For success in the salary provision a pay structure is developed. According to CIPD (2023a), pay structure include a collection of wage grades, levels or bands linked with related jobs in different hierarchies or series. This represent a framework for implementing reward approaches and policies. According to CIPD (2023a), the span of every grade represent percentage difference of the minimum and maximum salary in the range. For instances, when salary range in the span of £30,000 to £37,000 with grand spanning at 20%. The broader the level of span, the greater the progression potential. The examples of these include individual pay rates, spot rates and spot salaries, individual pay, job and salary ranges. Also, the salaries include narrow-graded pay structure, pay spines, broadbanding, job families and local pay structures.

Align vertically with organisation strategy–  For the salary component of reward, Cornelius du Preez and Folinas (2019) note that it is supposed to be in alignment with organisation mission, vision, purpose, culture and business strategy by encouraging the required behaviours and performance. For example, in an organisation such as Saudi Aramco, their strategy include sustainability, digital, industrial, manufacturing and social innovation. To achieve this strategy, the organisation offers competitive pay including upto $30,000 annually in HR specialists to $149,970 annually for management consultants. The pay is provided to ensure Saudi Aramco achieves their short and long-term strategy.

Align horizontally with organisation with other people practice(s)– The cash rewards horizontal alignment is evidenced by employees resourcing strategy. Also, the need for employees retention is impacted by compensation provided. According to Qiu and Sojourner (2023), when the demand is higher than supply, compensation is similarly higher. As part of resourcing in Saudi Aramco case, there is no employees who would be interested with leaving an organisation with pay below the industry standards. Further, through job evaluation, Saudi Aramco is in a position of establishing the wages and salary grades for entire jobs.

1.3 Component 2- Work-Life Balance

Work-life balance as a reward component entail the entire support offered by the employees including flexitime, job-sharing, transition from full-time to part-time working, compressed work hours, home-working, term-time only working and paid leave for caring for dependants in emergency care. According to CIPD (2018), work-life balance are found enabling the employees in appropriately judging the interface of work and extra-working demands. Hence, through an implementation of a successful work-life balance, it becomes possible supporting the employees job autonomy and enhancement of their perceptions of the management supportive level as opposed to by reduction of job demands. This is supported by CIPD (2018) report which found that owing to lack of flexibility, millions of new career paths are being pursued.

Align vertically with organisation strategy–  The vertical alignment with organisation strategy is evidenced by the increased productivity remotely and an appropriate gain of creation of an appropriate balance of work becoming tangible. For instance, Forbes (2022) report argue that 53% of the employees have a higher likelihood of prioritising on their health and wellbeing over their assigned roles. This is with 47% having a higher likelihood of prioritising on their families and personal lives.

Further, for Saudi Aramco to achieve their strategy for achieving sustainability, the organisation ensure that they thrive in the long-term and maintain the position as world’s largest integrated energy and chemicals organisations in the entire global energy transition (Saudi Aramco, 2023). Particularly, in early 2023, Saudi Aramco introduced application of monitoring, artificial intelligence and different tools for aligning business result with individual goals specifically those which enhance their wellbeing levels.

Align horizontally with organisation with other people practice(s)– Considering Saudi Aramco operations, through an investment in work-life balance, they are in a position of enhancing embracing of remote working and career growth. This has particularly been the case in their social innovation strategy. As evidenced in Saudi Aramco (2023) this entail support of intellectual, creativity and economic development of all employees. To ensure alignment with people practices, Saudi Aramco ensure there is an environment which is conducive for the employees achievement of work-life balance and career growth. The outcome of this is a significant increase in their morale and also an increased job satisfaction.  In affirming this, a report published in CIPD (2022) hypothesised that an implementation of flexible scheduling/work location as part of an organisation strategy increase the likelihood of its achievement/productivity. The outcome of this is achieving a 40% increase in strategies implementation and another 65% greater capacity for focusing compared to employees lacking flexibility.

1.4 Conclusion

In this report, different components of a reward strategy have been identified. These include salary pay and also the work-life balance. These components have been evaluated in detail with their alignment vertically with organisation strategy reviewed. Also, an evaluation of horizontal alignment with the other people practices within the organisation has been established. For rewards, the different components existing ensure the organisation success in their business environment. By providing examples from Saudi Arabia context, their strategies including sustainability, digital industrial, manufacturing and social innovation are aligned with the identified rewards. Also, the different people practice roles including resourcing, induction and retention have been evaluated to establish the relationship.

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