25 Aug 2020

Why now is the time for reward professionals to review their pay and recognition strategy

A new Charter has been developed by a group of well respected, independent reward professionals who worked together with government policy advisors and academics, to review recognition and reward in light of COVID-19. The group is now calling on the HR and reward community to re-evaluate how it recognises and rewards people as a result of the pandemic. An organisation’s approach must drive business recovery, but equally, reward professionals have a once in a lifetime opportunity to create a more equitable, collaborative and compassionate approach to reward.

The Charter, Reward After the Pandemic, sets out four guiding principles through which organisations can create equitable recognition and reward. With government attention on this issue, it is likely that in the months ahead, Boards will ask reward directors what they are doing to strategically review recognition and reward.

The four guiding principles

Future reward strategies should be based on success criteria that can create more compassionate and equitable workplaces. Organisations should consider:

The principles, goals and success criteria that underpin their current approach to reward and recognition.
Whether their current reward policies deliver on those criteria.
Whether changes need to be made.
What learnings from work during the crisis should be maintained or is there scope to adopt something completely different and new?

What does this mean for reward professionals?

Reward will need to assess their organisation’s current approach against the guiding principles outlined in the Charter. Dr Duncan Brown, independent rewards adviser and researcher, and visiting Prof University of Greenwich, who led the review, suggests that future reward principles should be able to show all employees have their efforts recognised in a way that is fair and consistent. This includes an appropriate distribution of reward and recognition between colleagues and maximum levels of rewards transparency and communication.

What do these principles mean in practical terms?

Organisations need to have a clearly defined process – for giving recognition or reward. The simpler the process is to understand and follow, the less likely employees will deviate from the guidelines. Lock the process down on a digital platform which helps staff to understand who can give reward and recognition. Combine this with a framework that gives managers guidance on whether financial reward should be given to further reinforce the recognition, and you have the key building blocks for a pre-defined route to give or approve recognition.

The platform should include a snappy explanation of the core values and behaviours the organisations wishes to encourage. Recognition is given against one of these values, helping staff to understand the type of behaviour the organisation wishes to encourage. Organisations may want to tweak values and behaviours to support business recovery and growth.

Evidence and report on consistency – organisations should be able to show a clear audit trail and publish regular reports to evidence the process is being followed consistently at every level of the organisation, including who has given recognition and who has received it.

Ideally, to encourage accountability across the organisation, you should have monitoring hierarchy. This enables leaders to understand which of their direct reports is giving recognition, where it is due. Armed with this data, leaders can share best practice from managers who are utilising the reward system to encourage success and support those who are less engaged to understand the value of greater engagement.

In turn, line managers can monitor reward and recognition activity across their own team. This information can be compared against other metrics of employee engagement to help them develop a clearer understanding of the relationship between recognition, motivation and engagement.

Distribute reward appropriately – here financial reward is attached to recognition, employers must be able to demonstrate to staff that it is being distributed fairly. Again, a dashboard enables leaders and reward teams to report on reward distribution and make adjustments as necessary. This prevents a concentration of reward at the top of the hierarchy. COVID-19 shone a light on the critical importance of lower paid, front line workers. Organisations need to be able to check reward is being given to employees across all business units.

Be fully transparent – employees need to have full visibility of who has received reward and recognition to have a sense that it is being applied fairly. This is particularly important while most businesses operate a hybrid workforce. There is a danger that staff working from home may feel invisible or fear the work of colleagues that have returned to office is being noticed over their own. A single sign on platform enables managers to give recognition in real time and all team members to see who is being recognised in real time.

Peer-to-peer recognition – any employee, irrespective of position, can give recognition to anyone else in the organisation. This approach is powerful as it gives employees a voice that isn’t filtered or approved by management and sends a clear message that recognition isn’t “controlled” by management. Employers that are relatively new to peer-to-peer recognition may wish to include the option of manager review until they feel comfortable that employees understand how to apply the guidelines correctly and then progress to remove manager review.

A recognition platform supports communication in multiple ways – branding reinforces the organisation’s identity. Pre-defined values reinforce company culture and encourage behaviours that underpin success. The platform acts as a constant reminder to engage with recognition at a time when many remote workers aren’t exposed to poster campaigns encouraging them to do so.

With the UK economy in recession employers need affordable solutions

As they recover, organisations need to keep a tight control over spend and budget. At the same time, authors of the Reward After the Pandemic stress: “the evidence is clear, reinforced by experience in this crisis: investing more, more effectively in employee rewards has many benefits. Employers can: attract high performing staff from diverse backgrounds, increase productivity as people add more value, because they see fairness in their rewards, the opportunity to progress, and appreciate the flexibility, security, recognition and support they receive.”

With this in mind, what organisation can afford not to review their strategy?

This article is provided by Edenred.