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Reward Management in 2018 – Back to basics, or ‘out with the old, in with the new’?

By Juan Novoa.

In a recent conversation about the evolution of HR with a very experienced – and dear – colleague, his view was that “… in 50 years in HR everything has changed and nothing has changed.”

Cue pause for thought. And now, an admission that this statement unavoidably rings true.

These words also set the stage very nicely for this article.

The month of January provides an opportunity to reflect on the goals for the year – and the route to achieving these goals. In the world of reward management, this is a good time to think about the right approach to face the many challenges 2018 presents.

On the one hand, we are seeing clients (re)adopting some of the core practices that the profession was built upon. We are also observing increasingly more willingness and even need in some cases, to break the mould and explore new avenues to address reward issues.

How to play it then?

In the best style of old consulting clichés, and I don’t mean ‘It depends’, the better answer to this question probably is: ‘a bit of both’. A balance of the old and the new if you will. Here is why.

The ‘wisdom’ component of ‘conventional wisdom’ is there for a reason. It is safe. It has been proven to work. And in many cases, it continues to work.

Let’s take Job Evaluation as an example. A cornerstone of reward management. Like beards and moustaches, it has come and gone with the time. And come back once more.

With ever-growing scrutiny on pay equality, organisations have turned to Job Evaluation once again to underpin their pay structures and add rigour to reward decisions. A significant increase in client activity in this space certainly shows that. Rightly so in our opinion.

Like Job Evaluation, going back to basics provides organisations with safety and discipline in the design and application of reward systems. Having well thought out principles in place, a clear – and relevant – pay structure and a systematic approach to making reward decisions are a must.

Alas, adopting too much of a conservative view can impair the flexibility of organisations to respond to a highly dynamic landscape, often bringing new challenges.

This is why we advocate the application of ‘unconventional’ wisdom too and encourage clients and fellow reward practitioners to rethink the way they work.

The world is changing. Fast. Technology and information are widely available. The social contract and employee expectations are being re-evaluated. More of the same will just not cut it anymore.

We need to change what we do and how we do it.

Think of performance-related pay for instance. How many companies can you think of that have actually got it right? Struggling a bit? Me too.

And yet, organisations keep relying on the same systems, processes and roles to, supposedly, ‘drive performance through reward’. It is time to try something different. We are working with clients to challenge the underlying assumptions of traditional performance management practices and explore new options that can truly deliver stronger results.

The role of the reward professional needs to change too. Being the master of spreadsheets at work, or at least challenging Finance for the title, is not enough.

We need to do more storytelling to put figures in their proper context – as anyone working on Gender Pay reporting should know – and really think about reward as much more than just financial compensation rounded up with some nice benefits.

Now more than ever actively managing the overall ‘employee deal’, the widely mentioned and often little understood Employee Value Proposition, is essential. This involves understanding, measuring and delivering targeted interventions to do the best for the business by doing the best for employees.

This, too, is a priority for QCG.

Challenging times? Perhaps. Exciting times? Definitely.

We will be touching on some of these issues and other topics of interest in the next event of the QCG Reward Leaders’ Forum on February 20th. Click here for information about the event and how to join the Forum. Or just get in touch.