Asia Pacific Journal of

Human Resources http://apj.sagepub.com/

Framework for Developing a Total Reward Strategy

Graham L. O'Neill
Asia Pacific Journal of Human Resources 1995 33: 103
DOI: 10.1177/103841119503300209

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 Framework for Developing a Total
Reward Strategy
Graham L. O’Neill
ANZ Banking Group Limited, Melbourne

Remuneration costs are a significant component of any public or private sector

organization’s operating budget. However, traditional approaches to remu-
neration planning and management are under increasing criticism for their
failure to meet current economic and business environment. A deliberate and
systematically designed remuneration strategy can provide an important tool
for supporting and reinforcing the link between the organization’s philosophy,
values and objectives and employee performance. This paper reviews the
current challenges and opportunities promoting change in remuneration

practices and provides a framework for developing a total reward strategy.

The objective is to define the design and delivery of a reward structure that
directly supports the enterprise’s business objectives and its cultural values.

Employee remuneration represents significant expenditure in any organization. Pay

and benefit costs are the largest single operating expense for most service compa-
nies and are typically the second or third highest expense category in manufacturing
companies. These costs include wages and salaries, superannuation and a wide
range of employer-provided benefits and related on-costs. Because they are such a
major expense item, they receive a lot of attention; unfortunately, the focus is most
often directed to controlling remuneration as a specific operating cost, rather than
viewing it as an effective tool for managing human resources to achieve the organ-
ization’s objectives.
Few companies have a clear statement of the philosophy and rationale underlying
what it is they want their pay and benefit practices to achieve. The fact is that
remuneration programs evolve, usually through managing the individual compo-
nents (e.g., wages and salaries, incentive or bonus payments, superannuation and
the variety of benefits available), and without thoughtful consideration of how each
individual element fits within the total package. As a result, the total program is
often independent of the strategic plans and operating objectives of the enterprise,
and only loosely related to the organization’s culture and values.
One of the surest ways to maximize the return on this investment is to develop
a deliberate strategy that includes not just the pay and benefits, but the total reward

mechanisms available to the company. This reward strategy should define the role
of each element in the reward process to achieve three specific objectives: first,
support the short, medium and longer term goals and objectives of the organization;
second, directly promote and reinforce its values and beliefs; and third, measure
the effectiveness of the human resource costs.

103

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TRADITIONAL REMUNERATION PLANNING AND MANAGEMENT

Up the 1970s Australian pay practices were relatively uncomplicated. Award-

to
covered employees received a weekly wage and very limited non-wage benefits.
Industry pay rates were determined through an industrial relations process that was
often heavily influenced-if not governed-by centralized, third-party bargaining
between unions and employer associations. ‘Staff employees received a salary and
benefits as determined and reviewed by the employer. At the management level,
the process of setting and reviewing salaries was much the same, but the range of
non-cash benefits was broader with superannuation and motor vehicles being the
major components.
In the 1970s and 1980s, life became more complex. Persistently high inflation
rates led significant annual wage and salary movements, pushing employees into
to
higher marginal tax brackets. For example, in 1960 it required 16 times average
weekly earnings to reach the top marginal tax rate; by 1985-86, it took only twice
average weekly earnings to achieve this dubious status (O’Neill, Hartnell & Clark,
1988). Many private and public sector organizations responded to this tax bracket
’creep’ by widening the provision of tax-effective benefits (such as motor vehicles,
representation or entertainment allowances and non-contributory superannuation)
from senior management to lower management levels, often including supervisors
and professional staff. As a result, much of the emphasis on remuneration planning
and management during this period focused on the tax-effective delivery, or ’pack-
aging’, of pay.
During this time of high inflation and, in some cases, quite creative (and often
questionable) pay delivery schemes, external market pressures became a significant
driver of pay. There was a need to maintain pace with competitive pay rates and
practices to attract and retain key staff (see O’Neill et al., 1988 for a full review).
However, this ’me-too’ attitude to perceived market practices also led to spiralling
remuneration costs, especially for salaried and management employees. It was in
this period that many companies began attempts to link pay to performance. The
use of merit-based salary programs increased and organizations looked for bonus
and incentive systems as a means of motivating and rewarding key managers and
staff.
Internal equity became a significant issue as competitive market forces began to
push pay up and expand the use of cash and non-cash benefits, especially for
professional, technical and managerial staff. A significant number of private and
public sector organizations began to invest in job evaluation systems as a basis for
ensuring internal consistency and equity in the planning, management and admin-
istration of their remuneration systems.
Up to the middle 1980s, if human resource managers were asked to outline the
objectives underlying remuneration planning and management in their organiza-
tions, they would be likely to answer in terms of the need to ’attract, motivate and
retain key performers’. The more thoughtful would then probably cite four princi-
ples underlying the design and management of their respective remuneration
systems.

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Internal equity The structure must provide a credible and defensible means for
establishing the ranking and relativities between all jobs for the purpose of pay
determination. Typically, this meant the installation of some form of job grading,
usually a job evaluation plan.
External competitiveness The organization needs to establish a competitive market
position in line with its
capacity to pay. This most often translated into a ’policy
line’ of paying at the median, 75th percentile, or wherever, on some chosen market
or industry survey source.

Individual motivation The pay system needed to reward employees based on their
performance. Larger organizations introduced ’merit’ systems based on individual
movement through a pay range assigned to the job. Smaller firms were typically
more discretionary and simply gave valued employees a bigger salary increase or
’

access to wider benefits.

Administratively simple The entire system needed to be simple to administer and,

tothe extent that there was any formal communication to employees, simple for
them to understand.

By the late 1980s, the majority of medium to large companies had developed
remuneration structures that incorporated these principles. However, they often
tended to be implemented as add-ons and without thoughtful consideration of the
overall integration. It may be argued that, in many instances, the resulting pay struc-
tures emphasized bureaucracy at the expense of corporate and individual goal
achievement and performance. Above all, the remuneration systems tended to
produce high fixed costs as annual reviews, merit-pay programs and the spread of
benefits often focused on market positioning and external competitiveness rather
than business needs. A fundamental point about pay becomes pushed aside when
market pressures dominate: what an organization pays, and how it delivers that pay,
should be an internal business decision that balances the company’s capacity to pay
with the need to pay.

CRITICISMS OF CURRENT REMUNERATION STRUCTURES

This traditional approach to remuneration planning and management is under
increasing criticism. Private and public sector organizations are developing leaner
and flatter structures, and adapting work processes to meet a highly competitive
business environment. In this context there is an increasing breakdown of traditional
corporate hierarchies, and different assumptions and expectations surround the
employer-employee relationship. From a cost perspective, many-if not a major-
ity-of firms are actively seeking ways to make a more direct link between
employee reward and organizational objectives. Terms such as new pay, strategic
pay, contribution-based pay and alternative reward strategies figure prominently in
the titles of books and articles suggesting altematives to the way that we currently
design and administer employee pay (see for example, Kanter, 1989; Lawler, 1990;
O’Dell, 1987; and Schuster & Zingheim, 1992).

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Four aspects of these current remuneration structures are singled out for particular
criticism.

Proprietary Job Evaluation Systems

These are job sizing systems used to establish the ranking and relativity between
jobs for the purposes of pay and benefit administration. A proprietary system is one
that uses a standard set of factors (e.g., education, problem-solving, decision-
making, accountability, number of people supervised, etc.) to compare job sizes
and establish pay levels within any organization.
There are two underlying assumptions embedded in all proprietary systems of
job sizing. First, the one standard set of factors is appropriate for measuring the
relativities and rankings of all jobs, across all industries and all sectors. Second, that
these standard factors are consistent with, and will therefore support, the business
objectives and cultural values of all organizations.
These assumptions do not hold up in practice. Many of these proprietary systems
were developed in manufacturing environments in the 1940s and 1950s-or in some

instances, considerably earlier (see for example Benge, 1972). As a result, the selec-
tion and design of the factors used to size jobs reflect the stable organization and
work designs, traditional manager-subordinate hierarchies and male-dominated
workforce demographics of that time. Consequently, these traditional systems tend
to indirectly emphasize status and seniority in the existing hierarchy, reinforce the
notion of entitlement, act as a barrier to change and focus employees’ attention on
increasing those job elements that lead to higher job points-and therefore increased
pay (Lawler, 1986).
From a broader perspective, individual organizations differ in their strategies,
objectives, cultural values and beliefs, operating environments and desired manage-
ment styles. How can a ’one-size-fits-all’ approach meet the diversity and uniqueness
of a politically sensitive and policy-oriented public sector organization and, at the
same time, capture the needs of an entrepreneurial, market-driven private sector

organization?
Merit Pay Plans
A typical merit plan has a structure that provides a minimum, midpoint and
maximum for each pay level or grade. In theory, employees are recruited as close
to the minimum as market forces permit and then progress through the range on
the basis of individual performance.
There are three structural problems with this sort of merit plan. First, employee
attitude survey results typically show that, when asked if there is a clear and objec-
tive link between individual performance and pay in their organization, the over-
whelming majority of managers and employees say no. The fact is that many
organizations do not have formal performance management and appraisal systems;
and, of those that do, the process seldom lends itself to objective, quantifiable or
qualitative measurement of the employee’s contribution to company performance.
Second, the amount available for distribution to employees under the merit plan

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is usually limited. In this present state of low inflation, 4 percent of the total payroll
is a common figure. This raises the obvious question of whether a differential of 4
percent between the top and bottom performers is a sufficient recognition. In prac-
tice, this difference is likely to be even less due to the common practice of making
sure that most employees get something from the merit pool.

Finally, merit pay plans directly contribute to increased fixed remuneration costs.
The merit component is rolled into the base salary and becomes the basis of next
year’s pay. It is not uncommon to have an employee at the top of the range even
though recent performance and contribution has tapered off.
Incentive/Bonus Pay
Many companies have an annual incentive/bonus system that provides rewards-
typically for managers-against some, usually predefined, performance criteria (e.g.,
achievement of net profit before tax, growth in revenue, annual budget, etc). O’Neill
and Payne (1991) are among many who have voiced concern about these variable
pay programs. First, they tend to be designed as an add-on to base pay; the only
risk to the manager is an absence of reward. In this sense, many incentive/bonus
systems have an up-side only. Second, when it becomes apparent that the perform-
ance criterion is unlikely to be met, the target is frequently revised downwards to

protect the annual bonus entitlement.

Focus on Salaried Staff

Traditionally, the focus of remuneration specialists has been on salaried (non-award
or exempt) rather than wages (award-covered or non-exempt) employees. This

implies that productivity, profitability, customer service and other key performance
indicators are more directly influenced by the performance of this smaller-and
more highly paid-group than by the majority of employees normally covered by

awards or agreements. In the absence of innovative pay systems that provide an

effective link between pay and performance, award-covered employees have often
developed their own informal reward structures around institutionalized overtime,
penalty rates and a host of ’special’ allowances: all of which help perpetuate inef-
ficient and expensive work practices.

THE OPPOR~TIES FOR CHANGE

The present environment provides important challenges for all organizations. In

meeting these challenges, there are many opportunities for private and public sector
organizations alike to review their remuneration systems and align the entire reward
process with key business drivers. Some of the major issues, and their implications
for reward structures, are outlined below.

Flatter Organization Structures

Few organizations have survived the tough economic conditions of the past few
years without some significant changes to their operating structures. For many, the

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first step reduce the their fixed overhead costs by downsizing the workforce.
was to
and reducing levels of management and supervision. Flatter organization structures
reduce the layers of approval required for decision-making. This has the potential
to increase the speed at which decisions can be implemented throughout the enter-

prise. Thus, what started as a cost control process, led naturally into a work design
issue.
The outcome in many companies has been an emphasis on designing work teams
that ’own’ and are accountable for defined parts of the work process. In organiza-
tions that have commitment to open and participative employee relations, the work
teams are often designed to be fully or partially autonomous. However, traditional

pay systems that reward jobs and individuals are inconsistent with a team environ-
ment based on flexible work roles and group contribution. Hence the need to design
different pay systems for the new work structures.

Gaining Employee Commitment

Faced with greater competitive pressures, it is now no longer sufficient to rely simply
on having business strategies that emphasize customer service, quality and produc-

tivity. What is required are effective means of harnessing all of the organization’s
resources to provide product and process innovation, increased responsiveness to
internal and external client demands and continuous improvement in all areas of
performance (see for example Wallace, 1992).
One approach gaining universal momentum is to build more collaborative and
participative organizations that emphasize employee . commitment rather than
employer control (Tucker & Strickland, 1991). Gaining employee involvement in this
way results in a work environment and climate where all employees have an active
commitment to a common set of values and goals. These ’high involvement’ organ-
izations will always expect to out perform their competitors because their entire
resources are directed towards the same, shared outcome.
Pay systems, traditionally used as a control mechanism, are evolving to support
the move toward commitment by providing a share in the financial success of the
enterprise to those who contribute. One clear example of this can be seen in the
growing interest shown by many companies in alternative reward systems such as
gainsharing, productivity incentives and profit sharing (e.g., Belcher, 1991). Another
example is in the design of performance management and pay systems specifically
designed to support Total Quality Management initiatives (O’Neill, 1993).

Paying for Individual Contribution and Skills

There is an inconsistency between recruitment and remuneration: organizations tend
to hire individuals but pay for jobs. This fundamental question of job-based versus

person-based pay is itself an issue of some debate (e.g., Kanter, 1989; Lawler, 1990).
Where organizations are being transformed away from traditional structures built
around stable jobs, the concept of a job is giving way rapidly to fluid structures built
on the notion of diverse and broadly skilled work roles (Bridges, 1994).

The pay system in many companies has a strong, but unanticipated impact on

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skill development. Traditionally,pay is based on position in the hierarchy. In most

organizations, the way to maximize your income is to increase your level in the
organization. This encourages individuals to acquire those skills associated with
being promoted to larger jobs. This has two consequences: first, it puts pressure on
the organization to create manager-style jobs to meet the career demands of ambi-
tious and talented people; and second, it ignores the fact that these ’promotion’
skills may not be the specific skills the organization requires to meet its immediate
or longer term operating objectives.
Identifying the skills required by the business, at all levels, and developing a pay
structure that rewards people for the acquisition and use of those specific skills, has
several benefits for the individual and the company. It provides a means by which
employees can increase their pay without climbing the hierarchical ladder; it directly
supports the company’s goals by focusing skill development activities on company
needs; and, it leads to a more flexible utilization of the workforce as employees
acquire a breadth and depth of skills (see O’Neill & Lander, 1993 for a comprehen-
sive review).

Job Sizing Based on Company Needs

In an environment where all companies are seeking a competitive edge in the
market, it is increasingly important to align pay with the strategy and desired culture
of the company. One direct way of doing this is to use key factors from the business
strategy and company values as the basis for sizing jobs and determining their inter-
nal relativities and respective pay.
For example, an organization may have a statement in its corporate mission such
as ’We will develop and maintain the highest level of service to all of our internal

and external clients’. Thus, client service becomes one of the factors against which
it sizes jobs. A list of the degrees of the internal and external client service required
by various jobs is established and weights are applied to each degree. Jobs are
reviewed to see where they fit against this factor and scored accordingly. This
process is continued for other factors drawn from the company’s strategic plans and
objectives. The result is a job evaluation methodology that values and rewards jobs
based on their direct contribution to the business rather than position in the hier-
archy or historic status.
Variable Rewards
The search is for flexible pay designs that do not fold into base pay and that will
vary directly with performance. Variable pay does not become a permanent cost to
the company or an annuity to the employee. This allows control of the fixed portion
of direct pay (and thus, employee costs), while the variable portion of direct pay
changes from period to period depending on individual, work-group, business unit
or corporate performance.
The use of variable pay as an element in remuneration permits companies to pay
based on their capacity to pay, rather than on external market pressures or other
factors that are often unrelated to business performance. It provides the opportunity

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to ’reuse’ pay dollars to grant meaningful cash rewards that do not become fixed
costs during times that do not warrant significant performance-based financial
rewards.

Integration and Control of Remuneration Costs

All organizations are paying closer attention to their cost structures. The need to
monitor and control human resource costs is encouraging many companies to plan
and review remuneration expense as an integrated total rather than to treat salary
and wages, superannuation, health insurance, motor vehicles, entertainment and
other employer provided benefits as separate, distinct and unrelated items. Clear
evidence of this is the increasing practice of periodically providing all employees
with a detailed breakdown of their total remuneration cost to company. This is a
graphic way of reminding people that, while base salary may be the most visible
and significant portion of their package, there are other cash, near-cash, deferred-
cash and non-cash benefits provided to them by the company.

DEVELOPING A TOTAL REWARD STRATEGY

The development of an effective total reward strategy requires a comprehensive
assessment of internal business factors, outside environmental and market issues
and an analysis of how the current reward components meet these internal and
external demands. A thorough examination of all relevant factors will provide the
basis for defining a future model and a specific implementation plan to direct the
change process. This framework, adapted from Haigh (1990), is shown in figure 1.
The assessment phases, and examples of the diagnostic processes used, are
described below.

Figure 1 Process for design of total reward strategy

Assessment of Internal Factors

The internal assessment is a critical step for determining the desired alignment of
rewards with business objectives and company values. It involves a disciplined

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approach for examining the implications of key elements of strategy and objectives,
management philosophy, organization structure and workforce demographics to
reward design and planning. Using this process, each internal factor can be used to .
reinforce one or more of the specific reward elements used by the organization.
This, in turn, provides the basis of a reward structure with clear linkages to the
business needs.
As astarting point, internal factors may be identified using existing company data.
Typically, this will consist of the strategic business plans, annual operating objectives
and any other material relevant to the organization’s philosophies, values, structure
and workforce. This information base is supplemented by selective interviews with
executives, senior line managers and, depending on the culture of the company,
focus group interviews with a sample of employees. Table 1 provides an example
of possible internal categories and factors for analysis.

Table 1 Likely intemal categories and factors for analysis

~ ~

Selection of the most appropriate performance indicators is an important aspect of

this step. In the 1980s, when many organizations began to look for suitable bonus/
incentive systems, the issue was ’We would like to link pay to performance, but how
do we do it and what do we measure?’ Most of those who pursued this task selected
a single, accounting or financial index-usually profit-as their measure. This

approach has the advantage of being simple to communicate and record. However,
the problem with using profit, or related financial and budgetary indicators, is that it
puts significant pressure on the budget setting and reporting process. Furthermore,
the targets set may be open to dispute due to the inherent limitations of accounting
information or subsequent management decisions and actions. Another major dis-
advantage of using traditional financial indicators is that they ignore more qualitative
business goals such as growth and market share objectives, and strategic values such
as continuous improvement, quality, customer service and safety.

A careful examination of all internal factors will provide a broader set of perform-
ance criteria that can be developed into specific measures. This provides a fairer
and more detailed process for evaluation of the company’s overall performance. For

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example, a decentralized company, which provides autonomy to operating units,

may decide that company-wide financial and related measures are not appropriate
to its structure. Instead, it may choose to identify key performance indicators care-

fully tailored to the operating groups; this may well include divisional centres used
for cost, revenue or profit purposes. In conjunction with financial and related indi-
cators, this allows for setting specific objectives around other areas such as market
share, service standards, quality and the like. While this involves a more diverse set
of measures, it sends a strong performance message specifically tailored to each of
the distinct operating areas of the business. Thus the company’s mission statement,
values and beliefs also become important determinants of the reward structure.
Inevitably, the process of designing a total reward strategy means that management
philosophies and values may need to be clarified and defined. This in itself is a
useful process for preserving and communicating them throughout the organization.
Examination of the organization structure, work design and team versus individual
job orientation are other factors to be considered. The workforce demographic
profile is a relevant indicator of employee needs. For example, a younger workforce
is typically more interested in cash-based forms of reward; an older workforce is
more likely to prefer a mix of cash and security items. Similarly, the company needs

to determine its philosophy regarding the provision of benefits for employees. This
includes consideration of the extent that the organization accepts, or shares with
the employee, responsibility for medical insurance, retirement lifestyle and welfare,
and whether such benefits extend to the employee’s family members.

Assessment of External Factors

The second step considers a broad range of outside issues that influence reward.
As with the internal assessment phase, it involves selection of key factors and deter-
mination of what reward planning actions are needed to meet them. Examples of
typical external issues are shown in table 2.
Table 2 Likely external categories and factors for analysis

Clearly, all outside factors can be accurately forecast. Nevertheless, keeping

not
abreast of market and industry trends, monitoring key economic indices and legislative
developments and maintaining awareness of community attitudes can provide value

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in the reward planning process. For these reasons, this step is often best conducted
using an environmental scan workshop with key executives and managers.

Designing a Reward Strategy

The final stage involves the actual planning and design of a reward strategy to meet
the organization’s objectives as defined from the initial steps. Ideally, this process will
do three things: it will develop a clear statement of the company’s reward principles
or philosophy; it will extend these principles, or the philosophy statement, into a series

of objectives that each reward component is expected to achieve; and it will develop
a comprehensive reward structure that meets the philosophy and objectives as defined.

The first step, developing the company’s reward principles or philosophy, will
inevitably require the commitment and ownership of senior executives. Thus, they
will need to take an active role in its development. Consideration should be given
to including other key stakeholders at this stage. Many companies have a board
subcommittee responsible for remuneration matters and its members should be
involved. Individual approaches, and consequently, end results differ. For example,
Dow Chemical communicate their Corporate Compensation Philosophy to ensure
that all employees understand the rationale underlying the company’s reward struc-
ture (Lawler, 1990) (see exhibit 1). Alternatively, the organization may choose to

develop a list of Core Principles for Reward as shown in exhibit 2. These core
principles then become the stated design criteria for the final reward structure.

Exhibit 1 Dow Chemical reward philosophy

~~~ ~~~~~~~ ~ ~ ~~ ~ ~ ~ ~ ~~~~~

Exhibit 2 XYZ Limited principles of reward

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The next step is to turn the philosophy or principles into a set of operational
statements that underpin the reward structure. This requires consideration of a
range of issues and how they will relate to reward; some of these issues are
outlined below.
Paying for performance What will be the role of individual, work-group, divi-
sion and corporate performance in determining reward? What form will perform-
ance-based pay take (e.g., bonus, incentive, merit pay)? Is it an add-on to pay or
(i.e., up-side only) or structured to be part of an at-risk component of pay?
Basis for pay How will internal relativities and pay levels be set? If job evaluation
is used, what process will be implemented? Will skill-based pay structures be used?
For whom? Will all employees be on salary? Will overtime be rewarded in cash or
kind?
Market comparisons What market(s) will be used for external comparisons?
What will be the market stance and will it be uniform for all operating areas, func-
tions and employees? Will there be annual or less frequent adjustments to the
market?
Benefits What role will superannuation, health, disability and death insurance
have? What levels will be provided by the company as policy or left to individual
discretion for selection as part of the ’package’? What will be the company’s phi-
losophy regarding employees’ own responsibility for medical care, life insurance
and retirement?
Wealth creation Will the company provide mechanisms for wealth creation? Will
this be in the form of shares, options, insurance bonds or other structures? Who will
be eligible? .

Perquisites What perquisites (e.g., car, travel, entertainment, etc.) will be pro-
vided, to whom and with what degree of personal choice?
Careergrowth What role will career development and growth play in the reward
structure? Will high performers have opportunities to take on more challenging
assignments-domestically or overseas?
Other reward elements Will discretionary leave be a part of the reward system?
Will a recognition/award program be implemented?
Communicatiorc and participation To what extent will reward issues be com-
municated to employees? What participation will there be in the design of variable
pay plans? Will employees be given total cost to company statements?
The final step is to audit the proposed plan before implementation. An effective
exercise for conducting this audit process involves a systematic evaluation of the
role of each keyreward element in meeting the objectives of the reward strategy.
This exercise is particularly useful for examining the combined effect of the total
strategy and identifying gaps where the proposed program does not meet key cor-
porate objectives. A model for conducting this exercise is shown in figure 2.
The last step is to finalize the design of the plan prior to implementation. Table 3
summarizes the necessary steps involved.

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Figure 2 Hlustrative reward strategy matrix

Table 3 Illustrative summary of implementation plan

CONCLUSION

The remuneration process, in any organization, has the potential to be a very

visible and significant form of communication. The amount that an employee is
paid, how this amount is determined and delivered, the benefits provided during
employment-and post-employment-send clear signals about the values, goals
and priorities of the enterprise. Much of the criticism of current remuneration

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practices centers on the fact that this potential is largely unused.

This is where human resource practitioners and remuneration specialists
an area

can provide added value in their organizations. First, practitioners need to be

fully aware of the business trends affecting their industry in general, and their
own organizations in particular. This allows the planning, development and imple-

mentation of reward initiatives to focus specifically on relevant operating issues.

Secortd; - the practitioner’s role is significantly easier if there is an educated line
management and executive. Raising management’s understanding and appreciation
of remuneration and reward planning-especially its connection with business
and human resource performance-is an important part of the professional’s role.
Finally, as Cook (1993) comments, when human resource and compensation
professionals develop reward systems that directly support the firm’s objectives,
they are providing a clear competitive advantage for their company. This is the
best demonstration of value-building that any human resource professional can
achieve.

Graham O’Neill (BA (Hons), Dip.App.Psych.) is chief manager, remuneration and benefits for
the ANZ Banking Group. Prior to this appointment he spent fifteen years in consulting roles,
including managing the organization and human resource consulting services for The Wyatt Com-
pany’s Melbourne office and for the Australian operations of Mercer, Campbell Cook & Knight. He
is on the editorial board of Asia Pacific Journal of Human Resources, editor of the book Corporate
Remuneration in the 90s, and co-editor of Australian Human Resource Management: Current Trends
in Management Practice. He has also published widely in Australian and overseas business and
professional journals.

References
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