Effective reward risk management
In order to proactively manage your reward risks you need to:
Establish effective reward risk intelligence-gathering systems.
Proactively review your reward strategy and systems for risk.
Use established risk management tools to assess and manage identified reward risks.
Know your reward risk appetite and manage risk consistent with this.
Build your risk management capability and develop a permanent risk management culture.
Whilst a framework can help to structure risk identification is helpful, it will useful if adopted in a culture where risk management is seen as a key organisational skill. This requires both HR professionals and line managers to work together to identify the main reward risks that threaten the organisations business strategy. However this may not be as daunting as it sounds. Most organisations already have a risk management system by which key risks are identified and managed across the organisations. Effective reward risk management was seen at a number of organisations where the HR team had tapped into the wider process and were using it as an effective means of raising and dealing with significant reward related risk in all of the risk groups outlined above.
Will your reward approach propel you forward-or hold you back and pull your organisation down? In these uncertain times, when agility and sustainability are key, it is important to know how you stack up against identified reward risk factors.
The report and the associated reward risk management tools can be downloaded here.