Some years ago, I worked for a division of a very large organisation. Given their scale, they had all of the reward tools and structures you might expect – grading, salary bands, a raft of incentives, etc – and these were all owned by the reward team at the head office.
There is certainly a case for centralised programs in reward, and defining one version of truth. It’s a powerful approach that helps organisations maintain an understanding of what’s happening across geographies and divisions and enables planning and insight.
However, the prerequisite for an effective framework is that it needs to be a dialogue, not an imposition, to deliver real value. In other words, the central owners need to talk to the local implementers to make sure their program is working in practice.
In my experience, implementation issues are more often based on a lack of mutual understanding than any unwillingness (however provoking it may feel at head office when the “regions” aren’t following your beautiful design). Sometimes all it needs is an open conversation to resolve an issue – and sometimes it needs a little more…
In this particular business, there was a group of jobs causing headaches for local HR. The roles were complex, specialised and proving hard to fill. Current employees were leaving and replacements were hard to recruit; those who were hired were being paid above the pay bands and causing a challenge for local HR.
You’ll probably see where this is heading, so here’s the punchline – the roles were graded one level too low, pushing them into lower pay bands and driving a recruitment and retention issue. This was particularly noticeable because the organisation was otherwise a destination employer with a great employee offer.
So, what had happened and how did we fix it?
It started with a tricky role, not fully understood by the central grading team (perhaps not even fully understood by the local HR team, but this one was pretty left-field). Not appreciating the complexities of the role meant it was under-graded, driving a below-market reward package.
Taking a fresh look at the role, using feedback from the local HR and recruiting teams as well as comparative analytics around experience and reward of the people in place provided enough evidence to request a review of the grade. This opened a dialogue, where information from the line and market information were discussed to give a clearer picture of the role.
The grades were increased, the package was increased, some people’s reward was increased and recruitment became possible. Happy managers, happy HR and happy head office because they could stand behind their systems and analysis with increased confidence.
It can be frustrating when you’ve worked hard on something and someone “out there” seems to have constant complaints. It can be equally frustrating when you feel your struggles aren’t being heard by “the centre”. Getting everyone “inside” will help with this – and will generally improve the solution as well. Analytics can be a helpful start to offer a fresh perspective and diffuse emotion so the conversation can begin.