Reward is what companies exchange with employees in return for effort. Want more effort? Improve your rewards. No, that doesn’t mean pay more (necessarily…)
Reward is about pay; you need to know your salary levels are competitive in your market(s). Likewise for your bonus plans, long-term incentives and benefits. This is where a lot of companies jump to benchmarking but, to be more effective, there’s a step before that.
The first step in understanding your reward programs – so you understand how they can be improved – is understanding the levels of job in your organisation. That means a grading structure – a transparent, consistent and validated grading structure. With this in place you can use your benchmarking data with rigour and be confident about your findings; you can also differentiate your incentive plans by level(s) as well as any benefits that tend to be tiered. Car benefits come to mind…
Arming yourself with an objective, quantifiable understanding of where pay may be low or high (or even just right) puts you in a position to address any areas where your challenge is around quantum. There may be fewer than you think! Seeing a consistent, transparent approach operating across the business can quiet pay concerns by arming managers with the information – and confidence – they need to communicate with conviction that you offer a fair pay deal. Your enhanced understanding of pay will give you the tools to help them.
When you know your quantums are at the right levels, you can address the broader reward spectrum; if low pay drives people to leave, these are the things that make them want to stay. Transparency and fairness already had a mention; they are an essential part of your communications approach, which will ensure people understand and appreciate every element of their reward package.
Alongside communication, recognition is a key part of reward. Recognition is working for you when your employees believe doing a good job makes a difference; it’s about talent management, development opportunities, promotions – but more than anything it’s about saying thank you. Genuine appreciation, thoughtfully delivered, will get you a lot further than a bit extra in the pay cheque.
The final element of reward is also about recognition – recognising the human needs of your employees. Offering flexibility in how or where people work, providing work space for quiet concentration and interactive collaboration, and addressing areas where organisation structures and processes aren’t effective all play a part in creating an organisation people want to be part of. So, yes, it is a reward issue – one where reward professionals need to partner across the business and role model the solution.