positioning reward for the future
TRANSCRIPT
Positioning Rewardfor the Future
Jon Ingham
Brought to you by:
Agenda
• Changes to date
• Current needs for further innovation
• New opportunities for the future
• Daring to be different!
Changes to date
• Broadening out from compensation into total rewards, especially with extended, innovated and flexible benefits
• Implementation of ‘the new pay’ with increased use and weight of variable reward
• More global perspective within an integrated approach to talent management, supported by better technology and analytics
Total rewards
Source: World at Work
The new pay
• Team based pay
• Skills based pay
• Competency based pay
• Variable pay
• Non-financial recognition
• Flexible benefits
• Market based pay
Reasons for restrained level of innovation
• Complexity in meeting reward objectives
• Need to bring existing employees along with changes
• General expectations in the job market
• Risk of getting it wrong
• General risk aversion
The new new pay?
• In many cases New Pay systems consume or destroy more value than they create
• New Pay systems often do not succeed because there are unavoidable barriers to strategic alignment
• Difficult to get right and easy to get wrong, it is time for a new, New Pay
Changes to date - Discussion
• What innovation have you implemented in your reward practice?
• Where do you see major opportunities for further transformation?
• Do you think Reward functions have been sufficiently innovative?, and if not, what can be done to increase openness to innovation in the future?
Current needs for further innovation
• Government policies
• Growing concerns
• New demands
• HR changes
Research, including neuroscience and behavioural economics
• Reward reduces performance particularly where creativity is required
• Useful role for prosocial rewards
• Importance of growth mindset
• Self determination theory: autonomy, relatedness, mastery, purpose
HR changes
Recruitment
Learning
CommunicationPerformance
Reward
Abolishing performance reviews / ratings
Source: NeuroLeadership Institute
Current needs - Discussion
• How are these forces affecting your companies?
• What actions are you taking in response?
• If you have or are planning to abolish performance reviews / ratings what are you using to inform reward?
New opportunities for the future
• Optimising current approaches
• Pay transparency and differentials
• Team based reward
• Broader use of technology
• Increased use of data
• Greater use of analytics
Optimising current approaches
• Personalising reward
• Communicating approach and value of reward
• Enabling managers to make pay decisions more flexibly
• Informing vs just supporting financial budgets
Pay transparency and differentials
• Data is already available (Glassdoor ‘Know Your Worth’, Linkedin salary tool etc)
• Enabler for pay equality but issue for pay differentials
Team based reward
• Need for equitable vs just equal reward
• Avoiding social loafing
– Paying teams for the performance of individual team members
– Paying individuals for their contribution to the team
Broader use of technology
• Social recognition
• Virtual currencies
• Gamification
Increased use of data
• Crowdsourcing inputs on performance
• Using data provided by technology including internet of things / wearables (quantified self / quantified organisation) etc
Better use of analytics
• Generating insight to inform decision making
• Running simulations
New opportunities - Discussion
• Which of these or other changes offer the greatest opportunity for improvement?
• What steps need taking to introduce these innovations?
• Is your technology helping progress or holding you back?
Daring to be different!
Business objectives
CompensationBenefitsWork LifeRecognition
Organisational context
Human capital
Social capital
Employee and candidate expectations
Experiment!
Why are companies so much more innovative when it comes to jiggering with their balance sheet or product line than human resources?It is a question that is dumbfounding Dan Ariely, and he told me that companies were loath to try out anything new on their employees. “There is no worse place to try to do experiments than human resources,” he said. “The first thing on their mind when they hear the word ‘experiment’ is lawsuits.”
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