Reward Reset — Redesigning Pay, Metrics & Talent at Logika Solutions

A four-round, advanced strategic-HRM and total-rewards simulation set inside Logika Solutions d.o.o., a €96M Slovenian software and IT-outsourcing firm in Ljubljana that modernised out of a state-computing-bureau legacy but whose reward system never caught up with its strategy. On 12 January 2026 four senior engineers resign in a week and the CEO commits the company to a new strategy — shifting from low-margin staff augmentation to higher-value product and platform work. Playing the HR Director, you must redesign pay and performance WITHIN a frozen €49.5M compensation envelope, not by spending more. The opening state is stark: only 8% of total compensation is variable (regional tech peers run 18–22%), the bonus pool still pays on billable hours and tenure, engagement sits at 58/100 (benchmark ~72), voluntary turnover among mid-level engineers is 21% at €38k per regretted exit (~€4.3M/yr), and an unexplained 11% gender pay gap is now visible under the EU Pay Transparency Directive. Round 1: diagnose the reward–strategy gap — is the root cause low pay, weak managers, or a strategy-misaligned system — quantify the cost of inaction, and decide whether pay equity is a precondition or an afterthought. Round 2: the core decision — reset the fixed-vs-variable mix from 8% toward 15–20%, choose the metric set that triggers variable pay (billable hours, aggressive individual ranking, or a balanced set of team delivery quality, client outcomes, skill acquisition and margin), and fund a talent-development line from the re-mix, where every euro added must be removed from base. Round 3: stress-test for equity and behaviour — the pay-equity audit lands (correct the gap at the base or grandfather it onto a new system), an individual-bonus side-effect has triggered internal competition that broke collaboration and lost a flagship account, and you must manage the change with the works council and a transition rule for the ~130 people worse off. Round 4: project the four board KPIs and defend the reset to the CEO, owning the trade-off inside the frozen envelope. The math encodes vertical and horizontal fit (Zupan's strategic-HRM lens): a strategy-aligned metric set, peer-band variable pay, funded development and corrected equity reward the player, while the five classic errors measurably underperform — across-the-board raises that break the envelope, metrics that contradict the strategy, perverse individual incentives, entrenched inequity, and change without transition or works-council engagement. Final KPIs track engagement score (/100), voluntary turnover (%), pay-equity gap (%) and a strategy-fit index, with the envelope held at €49.5M.