Publications
Design and delivery of employee reward systems
Using reward to drive long-term value creation
The performance management and reward of managers and staff is one of the most powerful tools for driving corporate performance. PA Consulting Group’s Managing for Shareholder Value (MSV) Survey reveals that companies that link their reward system with behaviors that drive long-term value creation can benefit from a significant increase in Total Shareholder Return (TSR).
Many companies, however, remain unsure about what constitutes good practice in remuneration design, and struggle to derive benefit from their reward systems.
To drive the creation of shareholder value, it is important to get both the design and the implementation of the system right. Research, and PA’s experience, demonstrate that companies are more likely to reap performance improvements if they adopt an approach to scheme design and implementation that recognizes potential pitfalls and is underpinned by:
- A robust vision and strategy
- Tailored design
- Pragmatic mechanisms for incentive scheme funding and allocation
- A comprehensive and well co-ordinated change management process.
"PA's latest research shows that few existing reward systems are truly value-based. Companies that do link reward to value creation deliver, on average, 9% higher TSR per annum."
Mark Thomas
Member of PA's Management Group
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