Four factors driving rewards success

Four factors driving rewards success

 

It's never been more important to get employee rewards right, yet it's increasingly challenging for employers to know what the market is paying, an expert says.

 

Speaking at  Korn Ferry Hay Group 2017 pay forum, rewards and benefits solution head Trevor Warden said the types of rewards and benefits employers offer and how they attract, motivate, engage and retain employees are changing as a result of 'megatrends', particularly individualism.

 

The company's global research revealed four key themes, he says, and the first of these is the need to ensure base pay is right.

 

Traditionally employers have referred to salary surveys for this information, but job titles are changing so quickly that one of the companies studied could only match 25 per cent of its jobs to published reports, he says.

 

Employers are also finding that employees and candidates are conducting their own research through websites such as Glassdoor – "they're coming to them and saying, 'well this is what I think the job is worth because I've done my research'", Warden says.

 

"The other issue that they're struggling with is that skills scarcity in some of the new jobs just suddenly pushes up the rate, and that volatility is causing a lot of issues."

 

The next theme is that the importance of tailored employee benefits continues to increase, particularly in light of the "clear rise of individualism", requiring employers to be flexible in the benefits they provide, Warden notes.

 

"We say, 'we're giving you retirement planning, we're giving you medical and maybe a company car', but some of the people don't want those, they need more," he says.

 

He suggests organisations consider a 'cafeteria package', "where we give a menu of benefits and people can choose what they want".

 

Beyond benefits, there is also increasing pressure on organisations to tailor incentives to what each employee wants.

 

"Some people might like money, some people might like career development opportunities, others might like benefits, and getting the reward and the metric right is going to be key going forward to getting incentives right," Warden says.

 

One organisation he worked with rewarded one employee each month with a certificate and voucher during a gathering in the cafeteria, until on one occasion, the rewarded employee approached their manager and said they'd leave if the manager ever did anything like that again.

 

"So not understanding that individual, not understanding those needs and not meeting those needs, nearly led to the exact opposite outcome of what the incentive was supposed to be."

 

Another organisation, on the other hand, provided its leaders with individualised incentives: one leader had an LTI plan because he wanted to stay with the organisation long-term; one was able to go overseas for a development course; one was rewarded via an STI plan; and another was allowed to rotate roles within the organisation.

 

Warden adds that too many incentives are linked to organisational metrics rather than individual performance, and this harms engagement: "Mary worked really hard this year, Mary thinks she's done a good job, but the organisation has done badly so Mary doesn't get her incentive. And there's a backlash where people are saying, 'that's just not good enough, I'm going to go down the road where I can get my incentive when I work hard'.

 

"There are more and more companies that say their annual review is no longer a given. More and more companies say that's not their policy anymore, and incentives need to fill that hole."

 

The fourth theme in the research was the growing need to get the intangibles right, Warden says.

 

Workplace culture, career development opportunities and engaging work environments are all now closely scrutinised by employees, and it is important that these things are tailored as much as possible to each employee's needs.

 

"Part of your offer or your reward package is getting that work environment and work culture totally right for the people that you need to attract," he says.

 

 

* Original article published by the HR Daily May 2017