To have an effective rewards system, you will NOT need to understand what?

To have an effective rewards system, understanding employees' previous salary is not generally considered essential. The focus of an effective rewards system typically centers around current performance metrics, benefits preferences, and market compensation trends, as these factors directly impact motivation, job satisfaction, and retention.

While knowing previous salaries can give context to an employee's compensation history, it does not directly inform the development of a future-oriented rewards strategy. Instead, performance metrics provide insight into the contributions employees make to the organization, benefits preferences allow for tailoring offerings to what employees value most, and market compensation trends ensure that the organization remains competitive in attracting and retaining talent. These elements are crucial for establishing a relevant and motivating rewards system that aligns with the goals of both the employees and the organization.