The Sound of...Flyin' High

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

http://www.youtube.com/watch?v=1RW3nDRmu6k

“...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.  

Photo courtesy of the BBC

The drivers that inspire people are complex, in addition to money people will give their employer their dedicated thought and labour to achieve objectives in return for: prestige, respect, status, dignity, the ability to learn, the sense of being part of team/belonging, time to pursue out-of-work interests, travel, generous praise and/or recognition, to name but a few.  As a result, smart HR professionals must not view Reward in isolation, away from the broader work environment.  

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.

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"

http://www.youtube.com/watch?v=OfJRX-8SXOs

              "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.

Black and White

Have you ever tried to get a Macadamia out of its shell?  They are quite literally “a tough nut to crack”, having the hardest casing of all nuts, requiring 300 lbs per square inch to break them.  In addition to the actual kernel, the shells have a hidden surprise, once you finally get into them their inside is smooth and shiny and split into two distinct parts, one portion dark and the other light.  I thought of Macadamia nuts this week, when the Cardinals were locked in the Sistine Chapel during the papal conclave and the world waited for black or white smoke.

Macadamia nuts

Black smoke rising from the Vatican's Sistine Chapel papal chimney 

As the process for the election of a new Pope demonstrates, much of what we do is determined by customs and regulation.  Today I had the pleasure of attending a roundtable discussion hosted by the Training Journal in partnership with learndirect.  It was to consider the report Lord Leitch produced for the UK Government in 2006, outlining what (in his opinion) needed to be done to make the skills of the UK workforce among the best in the world by 2020.  This year marks the midpoint toward that goal and it was sobering to contemplate the progress to date.  In case you have forgotten (or never knew) his proposals, in essence they were for:

·         95% of adults to achieve functional literacy and numeracy

·         More than 90% of adults to be qualified to at least level 2 (i.e. competence that involves the application of knowledge in a significant range of varied work activities, performed in a variety of contexts. Collaboration with others, perhaps through membership of a work group or team, is often a requirement. At British comprehensive schools, Level 2 is equivalent to one GCSE at A*-C )

·         A raising of the average rank of intermediate skills in the adult population from level 2 to level 3

·         More than 40% of adults to be qualified to level 4 and above (level 4 translates as competence that involves the application of knowledge in a broad range of complex, technical or professional work activities performed in a variety of contexts and with a substantial degree of personal responsibility and autonomy. Responsibility for the work of others and the allocation of resources is often present.)

The world has changed a lot since 2006, not least because of the global banking and financial crisis.  Lord Leitch’s aspirations and recommendations in the Review remain admirable, for example for employers to voluntarily commit to train all eligible employees up to level 2 in the workplace.  However, the financial constraints on many UK businesses have meant that they have had other issues to focus on, such as remaining viable in challenging times.  Many organisations have been forced into being quite short-term in outlook over the past few years.

However, this time, when many are unable to commit time and resources to skills training, is perhaps an opportune moment for us to consider the actual skills we need.

The “skills” we are encouraged to develop within the work environment are dependent on rigidly defined stages of attainment, utilised in our education system and prescribed for vocational training purposes.  I do wonder whether some of the hoops we are making people leap through are actually giving them what they need.  When I was at school we were taught to use a slide rule in maths – I’m not sure I could easily solve a problem with one now, but I doubt if I will ever need to.  The advent of sophisticated calculators has made them redundant.  I studied for two years for my A Levels and then had a few hours in which to regurgitate some of the knowledge stored inside me, in response to questions in the exam.  Was my actual capability in applying the knowledge I had being assessed or my ability to remember things?  Google and other search engines mean that I can get information swiftly about almost any topic – my memory is less important than my capacity to find appropriate facts and to apply what I discover to solve actual problems and inform decisions.  In my current work environment I need to be able to plan strategically, budget against the plan, inspire others to work with me to achieve defined objectives and ensure that all that has to be done is attained in a timely and efficient manner.  Is my law degree an obvious indicator of my possessing these skills, except in the most simplistic form of demonstrating that I can devise answers to exam questions and write them down within the time prescribed?

The world moves on and we need to progress with it.  How can we best equip and assess individuals for the actual skills they will need in working life?  I do not dispute the value of literacy and numeracy, but the conventional command and control approach of, for example, reciting the dates of kings and queens by rote seems unnecessary and outdated.  We need to work with schools and educational establishments to explain the skills that are and will be valuable in the workplace.  Futurists say that the future is collaboration and project focused – where and how can we best foster and see these traits demonstrated?  

There isn’t one easy solution – life isn’t black and white and the way of training and assessing the skills required for the future remains, like the Macadamia, a hard nut to crack...

Mr John Waldron cracking Macadamia nuts in Australia 1957
(Photo: People Magazine, State Library of Queensland & John Oxley Library; #7719-0001-0003)

Cracking Macadamia nuts