May 22nd, the date of the Carnival of HR (of which this blog is one small part), is an important date in my employer’s corporate calendar, it is when our Remuneration Committee and the Board meet to review, amend and approve the reward packages proposed for each of our employees. (For a glimpse of the full range of the Carnival of HR offering see http://s.shr.lc/167ai7a |, lovingly curated by Doug Shaw ( @dougshaw1 ) Thanks Doug - a tough job very well done. The URL is http://stopdoingdumbthingstocustomers.com/hr/the-carnival-of-hr-beginnings/ ) Back to my own day: although our financial year runs in line with the tax year, we tackle reward only after we know how the business units and individuals have performed. As in many organisations, for most employees the knowledge of what their salary will be for the next twelve months (and whether they will receive a bonus that could enable them and their family to have a significant holiday or pay for some anticipated expenditure), is the beginning of their planning for the year ahead.
Planning is important...
In fact, as this HR Carnival blog's theme is "Beginnings", I will start by saying that planning, prior to beginning almost anything, enables a better outcome and my intention in this post is to encourage you to think strategically and hence to become more effective in an important, but in my opinion under-valued, aspect of HR. So...
“Let’s start at the very beginning...”, as Maria sang to the von Trapp children in The Sound of Music
“...when you read you begin with A-B-C”, however, the song does not progress to “when you count you begin with 1-2-3”... it moves straight into singing about “do-re-mi”. Perhaps it is because I have been working with reward spreadsheets for the past few weeks (and hence have become somewhat obsessed), but I think HR needs to consider its relationship with “dough” (of the monetary variety), analysis and informed decision making, using management information (re M.I.). So many in HR are more comfortable with letters than they are with numbers. As the world becomes increasingly data focused, this could become a problem for our profession.
Reward is too often the ignored little spanner in the HR toolbox... perhaps because traditionally HR has neither valued nor attracted numerate, analysis-hungry, spreadsheet experts.
In most businesses, HR is recognised as the custodian of remuneration, diligently compiling benchmarking data to validate that salaries are in-line with competitors and that job offers and pay increases are not out of sync with the market. I am not saying that this is a bad thing. Everyone I have spoken with acknowledges that the basics have to be right (otherwise employees will become disengaged, feel undervalued, may walk and potential employees may decline to join). However, few HR professionals are doing more than managing the basics when it comes to Reward. People need to appreciate that Reward is so much more than simply “pay and rations”. Total Reward is an often over-used, but usually under-comprehended phrase. Total refers to "involving all aspects" of reward at work.
How often do we really think of Reward within the bigger picture of employment and the people involved in work? Most acknowledge that Reward is more than simply base pay, benefits, wellbeing initiatives and a potential bonus. The BBC is not famed for its high salaries and yet people strive to be able to work there, partially because of the experiential opportunities it can provide. No other organisation can enable you to be part of the production team making world-leading natural history documentaries with David Attenborough. People there find their roles "rewarding". A similar positive advantage can be considered applicable to people working in the not-for-profit or medical research sectors - their day-to-day jobs have the potential to change people's lives and that is gratifying in itself.
In most businesses, HR is recognised as the custodian of remuneration, diligently compiling benchmarking data to validate that salaries are in-line with competitors and that job offers and pay increases are not out of sync with the market. I am not saying that this is a bad thing. Everyone I have spoken with acknowledges that the basics have to be right (otherwise employees will become disengaged, feel undervalued, may walk and potential employees may decline to join). However, few HR professionals are doing more than managing the basics when it comes to Reward. People need to appreciate that Reward is so much more than simply “pay and rations”. Total Reward is an often over-used, but usually under-comprehended phrase. Total refers to "involving all aspects" of reward at work.
How often do we really think of Reward within the bigger picture of employment and the people involved in work? Most acknowledge that Reward is more than simply base pay, benefits, wellbeing initiatives and a potential bonus. The BBC is not famed for its high salaries and yet people strive to be able to work there, partially because of the experiential opportunities it can provide. No other organisation can enable you to be part of the production team making world-leading natural history documentaries with David Attenborough. People there find their roles "rewarding". A similar positive advantage can be considered applicable to people working in the not-for-profit or medical research sectors - their day-to-day jobs have the potential to change people's lives and that is gratifying in itself.
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| Photo courtesy of the BBC |
A number of organisations have undertaken research into the impact of Reward. A recent, notable paper is Aon Hewitt’s 2012 study into Total Rewards, which demonstrates a link between reward and high performance (as evidenced by companies achieving significant revenue vs. objectives, degrees of innovation and high levels of employee engagement). A significant element of the success seems to be down to communication, not just espousing Total Rewards but articulating a clear strategy that includes objectives, measures and competitive positioning (back to HR’s need to understand and use data). Before determining the strategy employees, as well as managers and the top leadership, are asked what they want – the advent of technology and social media has made it so much easier to be personal, to solicit feedback and suggestions.
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| Landing Signal Officer's Communication - as used on HMS Ark Royal |
According to the Aon survey, Total Rewards impact at various stages of the employee life cycle, namely:
Top factors influencing Attraction:
- Competitive base pay
- Competitive health care benefits
- Financial stability of business
- Flexible working
- Good pension provision
- Number of days’ holiday
- Reputation as “a great place to work”
- Promotion prospects
- Challenge/stimulating work
- Culture
Top factors influencing Retention:
- Faith in senior leadership re future direction
- Tools to do the job
- Health care benefits
- Sufficient resources
- Reliable colleagues
- Career opportunities/clear career path
- Good relationship with line manager
- Supportive culture
Top factors influencing Engagement:
- Clear career path
- Involved in decisions that affect their work
- Appropriate resources
- Development
- Team
- Colleagues going the extra mile for success
- A culture of personal development
- Good managerial relationship
- Comprehensible decision making
- Appropriate benefits
The best businesses are brilliant at using certain elements of Total Reward (such as manager effectiveness, inclusion, culture, values, learning and career development) to emphasise the factors that differentiate them from other employers in their field. I have a little experience of this – I co-founded a business in 2000 and within a short space of time we were deemed best of breed in our sector. It was hard work and demanded long hours to get the business off the ground, but, without exception, my colleagues at all levels in the business valued being part of a team that was “making history”. We were not the highest payers and we did not have the swankiest offices (indeed our premises as we grew were close to the end of their natural life and hence provided cheap rental), but our sense of community, mutual respect, genuine fun, shared success and mutual appreciation made up for most of the hardships. HR had a fundamental role to play in the success of the business.
The time has come for all of us in HR to realise that we can and should make a difference. We have the ability and tools to enable both our workers and our businesses to become high fliers.
So, returning to the theme of Beginnings, let's make a start, let's change the way we think about Reward. We want our employees to be truly engaged and to be feeling good about where they work. It's a new dawn, it's a new day, it's a new life...
Nina Simone singing "Feeling Good"
"Feeling Good"
Birds flyin' high, you know how I feel
Sun in the sky, you know how I feel
Breeze driftin' on by, you know how I feel
It's a new dawn, it's a new day, it's a new life for me.
Yeah, it's a new dawn, it's a new day, it's a new life for me, ooooooooh...
And I'm feelin' good.
Fish in the sea, you know how I feel
River runnin' free, you know how I feel
Blossom on the tree, you know how I feel
It's a new dawn, it's a new day, it's a new life for me,
And I'm feelin' good
Dragonfly out in the sun, you know what I mean, don't you know,
Butterflies all havin' fun, you know what I mean.
Sleep in peace when day is done: that's what I mean,
And this old world is a new world and a bold world for me...
Stars when you shine, you know how I feel
Scent of the pine, you know how I feel
Yeah, freedom is mine, and I know how I feel..
It's a new dawn, it's a new day, it's a new life for me
[scat]
And I'm feelin'... good.
Sun in the sky, you know how I feel
Breeze driftin' on by, you know how I feel
It's a new dawn, it's a new day, it's a new life for me.
Yeah, it's a new dawn, it's a new day, it's a new life for me, ooooooooh...
And I'm feelin' good.
Fish in the sea, you know how I feel
River runnin' free, you know how I feel
Blossom on the tree, you know how I feel
It's a new dawn, it's a new day, it's a new life for me,
And I'm feelin' good
Dragonfly out in the sun, you know what I mean, don't you know,
Butterflies all havin' fun, you know what I mean.
Sleep in peace when day is done: that's what I mean,
And this old world is a new world and a bold world for me...
Stars when you shine, you know how I feel
Scent of the pine, you know how I feel
Yeah, freedom is mine, and I know how I feel..
It's a new dawn, it's a new day, it's a new life for me
[scat]
And I'm feelin'... good.
Excellent blog post. As a reward expert one often feels like being a beleaguered minority of one. HR as a profession has been slow to come to the data table and even slower to use analytics to support their interventions and HR products. IT and Finance often seem to have more “clout” with the business than HR; is it perhaps because they are used to presenting good data to back up decisions (albeit those decisions may be wrong!). In HR we talk that many important things cannot be measured, true; but many important things, particularly when linked to business metrics can. HR needs to up its numerical and data analysis and presentation; we can live in hope….
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