Well-designed and properly executed rewards programs are a critical part of establishing the bench strength that enables a company to achieve its strategic objectives — this is one area where organizations can least afford to skimp.

Executives should therefore review their strategies, systems and processes to make sure their organizational rewards structures are properly designed to promote sustained success for their companies. Organizations cannot afford to view reward spend simply as “the cost of doing business.” Rather, it has to be seen and managed as a dynamic lever that can communicate what’s important as well as acknowledge individuals and teams for helping to positively alter and sustain company performance.

For more than a decade, Hay Group and Fortune magazine have joined each year to identify the World’s Most Admired Companies (WMACs) and uncover the business practices that make these companies highly regarded. As Fortune highlighted when discussing this year’s WMACs: “Stress in the recession and financial crisis brought out traits that may not have been noticed when the sailing was smooth. Upstarts became champions. Famed competitors fell behind; some didn't make it through the storm.”

But challenging times create opportunities for individuals as well as organizations to display their mettle.

When times are tough, strong leadership is essential and individual contributions are easily distinguished, a vice president of human resources for a Fortune 500 building products manufacturer said.

To sustain performance, organizations need to retain top contributors. A weak labor market associated with the economic downturn may have held down turnover rates in many organizations, but it could be argued that companies are in the eye of a turnover hurricane. Those organizations that have failed to identify and act on issues negatively affecting employee commitment during this break in the storm are likely to find employees exiting in increasing numbers as other opportunities become more plentiful.

With increases in unwanted turnover come increasing costs. Studies estimate the cost of replacing employees to be between 50 percent and 150 percent of salary. The hidden costs of turnover may be even greater in terms of disrupted customer relationships, lost organizational and job-specific knowledge, cultural decay and increased strain placed on remaining employees.