Flexible rewards from a strategic reward management perspective

This article interprets the results of a survey held in Belgium and the Netherlands regarding the prevalence and perceived outcomes of adopting flexible reward plans within a strategic rewards perspective.

Flexible reward arrangements (e.g., flexible benefit plans) have been around since the 1970s. However, there is a need to apply a strategic rewards perspective to flexible reward plans to help organisations move from ‘best practice’ to ‘best fit’.

This article highlights whether and how flexible rewards should be embedded in, and driven by, an organisation’s external and internal business contexts. This would imply that a strategic reward management perspective is needed to guide decision-making about flexible reward plans and also that flexible rewards are an important tool from a strategic rewards perspective.

A model of strategic reward management

The article proposes the Vlerick model of strategic reward management and applies it to the issue of flexible reward plans. More specifically, the authors describe and discuss which elements of a firm’s external (e.g., tax legislation, labour market, industry) and internal (e.g., company culture, strategy) environments drive the implementation of flexible reward systems. The article also provides concrete results of a survey on the prevalence and functioning of flexible reward plans in Belgium and the Netherlands.

The authors conclude that flexible rewards are not a passing fad. On the contrary, they should be considered from a (long-term) strategic reward management perspective before deciding on their implementation.

Source: Flexible Rewards from a Strategic Rewards Perspective” published in Compensation and Benefits Review 2012 44: 40. Research by professor Xavier Baeten, and researcher Bart Verwaeren at Vlerick Business School.

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