Getting reward right is one of the most powerful ways an organisation can attract, motivate, and keep talented people. At CIPD Level 5, this is explored in depth in unit 5HR03: Reward for Performance and Contribution, which looks at how reward strategy underpins culture, performance and business results.
In this article, we’ll unpack:
- what “reward” really means in people management
- the total reward approach and why it’s so widely used
- how fairness, consistency and transparency support a positive culture
- the link between reward, “good work” and legal compliance
- how these principles are brought to life in the Level 5 People Professional Apprenticeship from VQ Solutions
What do we mean by “reward”?
In people management, “reward” is much more than just salary. It covers the full package an employee receives in return for their contribution, including:
- pay and bonuses
- benefits and allowances
- recognition and progression
- learning, development and career opportunities
- the quality of day-to-day working life
CIPD Level 5 learners are encouraged to think about reward strategically – not just “what do we pay?” but “how does our approach to reward support the kind of organisation we want to be?”
The Total Reward Approach
A total reward approach looks at the whole experience of working for an organisation – both the tangible elements (pay, benefits) and the less tangible ones (recognition, culture, development).
Intrinsic and extrinsic rewards
- Extrinsic rewards are the visible, tangible elements: salary, overtime, bonuses, commission, pensions, healthcare and other benefits.
- Intrinsic rewards are the internal, psychological rewards that come from the work itself: a sense of achievement, autonomy, meaningful work, growth and recognition.
An effective total reward strategy balances both. Competitive pay matters – but so does feeling valued, listened to and able to grow.
Fairness, consistency and transparency
Reward decisions are often highly sensitive. Three principles are critical:
- Fairness – similar roles and contributions are rewarded on a comparable basis.
- Consistency – policies are applied in the same way across teams and over time.
- Transparency – people understand how decisions are made (even if they don’t always agree with the outcome).
When these principles are missing, trust erodes quickly. When they’re present, reward becomes a powerful driver of engagement, performance and retention.
Building a culture of trust
A total reward approach isn’t just about schemes and pay structures. It also supports a culture where:
- managers give regular, honest feedback
- good performance and positive behaviours are recognised
- employees feel safe to raise concerns about fairness or bias
- communication about reward is open and two-way
This “culture of trust” is central to modern people practice and is a strong theme in CIPD Level 5 study.
Balancing internal fairness and the external market
People professionals must constantly balance two key pressures:
- Internal equity – ensuring employees feel they are paid fairly compared to colleagues doing similar work.
- External competitiveness – ensuring salaries and benefits are in line with the wider labour market so the organisation can attract and retain talent.
This might involve:
- benchmarking roles against market salary data
- reviewing pay structures regularly
- using non-financial rewards where budgets are tight
- involving managers in explaining and owning reward decisions
Linking reward to business objectives
Reward works best when it clearly supports the organisation’s strategy. For example:
- performance-related pay linked to key business metrics
- recognition schemes that encourage collaboration, innovation or customer service
- bonuses based on both individual and team performance
For CIPD Level 5 learners, this is where theory meets practice: you are encouraged to think about how reward can reinforce the behaviours and outcomes your organisation most needs.
Implementing reward policies and practices
A well-designed reward framework will only succeed if it is implemented effectively. This typically involves:
- clear, accessible policies and guidance
- training for managers so they can make confident, evidence-based decisions
- consistent record-keeping and monitoring of reward decisions
- regular reviews to ensure approaches remain fair, affordable and aligned with strategy
People professionals play a key advisory role here – supporting managers, challenging poor practice, and using data to inform decisions.
Reward, “good work” and employee wellbeing
Reward is also closely linked to the concept of “good work” – jobs that are:
- fairly paid
- reasonably secure
- designed to provide autonomy, variety and development
- supportive of work–life balance
A thoughtful reward strategy can help:
- improve motivation and job satisfaction
- reduce turnover and absence
- support equality, diversity and inclusion
- enhance the organisation’s reputation as an employer of choice
Legislation and ethical practice in reward
Reward strategies must also operate within the law. While legislation will vary by country, common considerations include:
- equal pay and avoiding unlawful discrimination
- compliance with working time and minimum wage regulations
- the tax and reporting requirements linked to benefits and bonuses
For people professionals, this isn’t just about avoiding legal risk – it’s about making sure reward systems are ethical, defensible and genuinely inclusive.
How the Level 5 People Professional Apprenticeship brings this to life
At VQ Solutions, the Level 5 People Professional Apprenticeship is a comprehensive 22-month programme that explores these reward principles in a practical, applied way.
The programme covers:
- Talent management – attracting, selecting and retaining the right people.
- Payroll and benefits – understanding pay structures, benefits and their impact.
- Employee relations – maintaining positive relationships and managing conflict fairly.
- Strategic contribution – aligning people practice with organisational goals.
- Advisory skills – giving clear, evidence-based advice on policies and employment law.
- Core people practice skills – communication, negotiation, data analysis and evidence-based decision-making.
Learners are supported through:
- a state-of-the-art Learning Management System (LMS) with structured resources
- 30+ live online tutor-led classes across the programme
- one-to-one mentoring and regular review meetings
- applied assignments that encourage you to use your own organisation as a case study
This means learners don’t just understand reward in theory – they can design, explain and implement effective reward practices in the real world.
Funding and CIPD certification
For employers in England:
- If you’re an apprenticeship levy payer, you can fund the full programme cost through your levy account.
- Non-levy paying employers can usually receive up to 95% of the training cost through government co-investment.
On successful completion, learners achieve the CIPD Level 5 Associate Diploma in People Management – an internationally recognised qualification that strengthens both individual careers and organisational capability.
Ready to develop your expertise in reward?
If you’re responsible for people management, or you’re looking to build your HR career, understanding reward is no longer optional – it’s essential.
The Level 5 People Professional Apprenticeship with VQ Solutions helps you:
- build a robust understanding of reward strategy and practice
- apply CIPD principles in your own organisation
- gain a respected professional qualification while working
If you’d like to explore whether this programme is right for you or your organisation, get in touch with VQ Solutions to discuss next steps.