Blog Article

The Changing Face of Reward – implications for HR and reward – tenth in a series

Posted by John Branch

John Branch

Whilst conducting such a review, in our experience, it is often helpful to be mindful of the following points:

  • The need to ensure a balance between emphasis on cash and other elements of reward, both tangible and intangible.

Segment employee groups by some simple criteria (gender, age, technical/support as appropriate) and review whether the current offer fully addresses the expectations of key employee groups as well as target demographics. Are there gaps in the non cash reward that is offered (benefits, recognition, career development etc,) for any key segment? Are the existing elements of the offer well understood, appreciated and utilised by the intended recipients? What drives overall employee engagement and retention within your organisation?

  • Review reward management policies and their deployment to ensure that they are based on objective assessment of merit.

In this aspect it is very much a case of ‘not what you say but what you do’. Is performance objectively linked to reward and are there further opportunities to strengthen the link e.g. performance linked benefits? How is the salary review process managed and are the criteria consistently applied? How well communicated are reward management policies and do employees have a clear understanding of how contribution is linked to reward? Check how many ‘exceptions’ to the rules exist or whether there is substantial inequity between job size and pay. Ask whether this is an indicator of ineffective reward management.

  • Review the performance management process to ensure it is effective and reliable.

Review previous year’s ratings and question how reliable they are. Could key employee decisions be based on these ratings and can they stand up to open scrutiny? Do objectives/KPI’s etc consistently reflect departmental goals and are they, broadly speaking, equally stretching for all? Do employees buy into their objectives? Is there a well deployed coaching and review process in place? Are final outcomes and ratings discussed and agreed and do they discriminate consistently and sufficiently on the basis of actual performance? Do the ratings link into salary review, succession planning, promotion decisions and recognition of high performers?

  • Ensure that appropriate incentive plans are in place and are understood and valued by participants.

It has often been observed that if a component of reward is not understood by the recipient then it cannot be effective. This is particularly true of bonus plans. Is the existing plan entirely discretionary, in which case it is likely to be an ineffective means of incentivising employees. Assuming plans and scheme performance criteria exist, are the criteria and rules widely communicated to participants? Is progress against targets reviewed regularly so that participants know how they are tracking, both at the level of personal and organisational targets.

  • Benefits; review the opportunity to introduce employee choice.

One thing is clear from our understanding of demographic and life stage difference, there can be no one size fits all solution to total reward. In some cases design or opportunity can be targeted on a particular group (as in the case of long term incentives for high potentials and key retention targets) but in other cases it is desirable to provide employees with the opportunity to exercise choice. Employee choice is one of the more intractable issues for reward in the Middle East, to date there has been little appetite to tackle the issue. But as a cost effective alternative to throwing ever more money into the reward offer, a gradual introduction of some benefit choice and flexibility should offer employers a chance to build a leading position in the competitive recruitment market and also begin to address the differing needs of various employee segments.

  •   Communicate a compelling career development offer.

As a key part of total reward it is vital to ensure that there is a career development process in place; career ladders, competency frameworks, targeted training and development opportunity, an objective internal promotion processes. Review how widely communicated and understood this is.

In tomorrow’s post I will sum up my findings from our research and will have a link to download the final white paper that combines all of my posts in to one document.

 

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