Friday September 8, 2017
The need to keep pace with changing expectations in the workplace has been a regular theme of Vana Resourcing’s blogs. And when HRD Magazine recently covered ‘The Future of Reward & Recognition’ it got us thinking about how organisations have been forced to revisit this policy area to ensure they remain rewarding and attractive places whether to current or potential employees.
So what does the reward and recognition landscape look like in 2017?
Employee expectations may change but reward and recognition continues to have a major bearing on retention. A recent study published in HR Magazine revealed that 49% of employees would leave a company if they weren’t recognised for good work. The study, commissioned by Reward Gateway, also suggested that traditional approaches would have to change if organisations wanted to hold on to their talent. According to Reward Gateway’s CEO, Glenn Elliott, “if companies want to improve employee engagement, motivation, and retention they need to urgently divert investments from tenure-based, long service award programmes which aren’t working but are costing businesses a fortune.”
As for what should be the foundations of a progressive reward and recognition strategy, an international Recognition in the Workplace survey of over 1000 HR professionals found that three elements combined - celebrating service, rewarding results and encouraging effort – achieved higher levels of productivity and pride.
We spoke with some of our industry contacts to understand their approach to reward, and whether it was consistent with the picture being presented by the industry media.
What we found was that despite variations between individual company strategies, all were built on the principles of transparency, competitiveness, fairness but also flexibility to reflect different skills, performance levels – and in one case a multinational and multi-generational workforce. Importantly they also had to support the organisation’s culture and values – a point emphasised by the founder of a specialist reward consultancy. “The key consideration is to align with and help enhance the company strategy/culture. Of course, principles of being fair, transparent and competitive remain important but recent trends in the workplace mean that underlying designs need to be far more agile and flexible to accommodate different pressures such as demand for niche skills.”
The need for greater flexibility and openness, combined with cost pressures, have driven companies to re-evaluate reward and recognition. Inevitably, the process of changing to a new strategy hasn’t always been straightforward. Existing (bespoke) arrangements and general reluctance to change were given as common barriers to progress, and change was certainly difficult for one business with offices outside the UK where the local culture exerted an influence. But according to a Performance & Reward Director from the financial services sector, these could be overcome through ‘clear, consistent communication and messaging of what it means for individuals’. “The biggest issue is ensuring that management are aligned to the changes and support the messaging.”
What exactly employees place a value on varies also. One individual summed it up this way; “Reward is to some extent a hygiene factor. What is valued by employees will depend on their career aspirations. For some it may be work/life balance and job security, whereas for more senior employees it will be more around recognition of their contribution, empowerment, and career progression.” Employee experience has increasingly become a factor but reward in its purest sense - traditional remuneration - still plays a big part.
So, are corporate reward and recognition policies keeping up with evolving workforce expectations? Just about it seems. New technology is making policy more applicable and engaging to a tech-savvy workforce, personalising reward and fuelling a ‘recognition tech’ industry. For example, the employees of digital department store Shop Direct use 'Shine' – a Facebook-style tool that allows peer-to-peer recognition at all levels/locations. Our source in an international engineering consultancy has followed a similar approach, using mobile phone apps as well as a number of internal social networking resources within the context of reward and recognition.
The challenge for HR professionals - and businesses - appears to be keeping in touch with the infinite possibilities offered by this technology – certainly according to the Head of Reward for an insurance company. “For the first time in the history of HR, tech is ahead of demand. Tech capability is ahead of what HR can handle so we are in catch up mode – the possibilities are endless but traditional businesses… need to start to listen to what the new generation want. Tech costs money and companies need to realise that it’s no longer a choice – to play you have to pay.”
In summing up, corporate reward and recognition has had to keep up with changing work patterns, expectations, and the growing emphasis on ‘employee experience’. We’re seeing a clear link between media analysis and the experiences of our industry contacts. Where change has been necessary, traditional remuneration still holds sway but the scope of reward and recognition has expanded to meet individual circumstances or embrace less tangible elements. Within this context, technology is a significant enabler – and challenge – for organisations looking to keep with the times. But with all of this comes the point that a competitive reward and recognition approach is only one piece of the jigsaw. As one of our contributors put it, “the offer has to be right but culture is more important, and first impressions last - the interview experience and initial engagement, as well as the reputation of the firm.”
A reminder that, even with the best reward strategy, organisations have to consider the complete picture to attract the best talent.