By Clive Wright, Hyperion HR
It was after a discussion at a networking group that I started to really look at what’s going on in reward. The question I am asked more than any other is ‘What’s new in Reward?’ So I started to look at recent research, the articles in journals and ask around to see what companies are doing.
I came to the conclusion that there is really very little new in reward at present. The days of companies and consultants in the US coming up with their latest programme or model, the ‘better’ way (or worse ‘best way’) of doing things seems to have died down. In the past we were seduced by these new approaches (which in many cases were the old programmes but jazzed up with new, sexy names) and implemented them for our own companies. Consultancies were to blame much of the time; their colleagues in the US had done it with some success so they thought they should get us to do it on this side of the pond. But we were equally culpable as we didn’t question the appropriateness of the ‘fad’ and went along with it.
But today the emphasis is on getting it right, more than doing something new. After the economic downturn many organisations, public and not-for-profit as well as private, have reviewed and changed their business strategy and the reward specialists have, quite correctly, looked at what needs to change in their area.
This has led to them revisiting their reward strategy, if they had one, or developing one to fit the new organisational reality. In many cases the resulting changes have been to tighten up their existing programmes and processes, look at the responsibilities and accountabilities and train line managers in how to use reward more effectively.
It looks as though we are going to get back to a reasonable level of annual pay increases that are meaningful enough to look again at pay for performance. How we use this and the effectiveness of our performance measures and performance management culture will be more important, I suspect, than dreaming up a new grading structure or designing a new incentive scheme.
The focus for many companies over the next few years will be establishing clearly how their reward programmes support the business and people strategy, making sure that policies and processes are effective, fair and equitable and making sure that line managers throughout the organisation understand the objectives of reward in its widest sense and how to use it effectively to drive employee engagement and business performance.
It’s an old cliché but ….. best fit rather than best practice.
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