Reward is no longer one-dimensional, it’s about embracing a true EVP approach to become more flexible.

The focus around how reward should be provided is shifting to meet the rapidly changing needs of organisations. No longer will jobs sit within their own silo, where reward is measured and provided simply against a one-dimensional measure, like sales growth. Instead a more flexible approach is needed, one that recognises that employees operate within a concomitant structure that impacts and is impacted on by the performance of others. In effect there is a growing recognition that there is a new way employees, particularly senior managers, achieve success.

As a result reward is undergoing its own transformation to try and keep pace with the new interconnected world order and a more holistic approach is being adopted that is more in line with a total Employee Value Proposition (EVP). This approach takes into account the long-term benefits that a strong EVP can deliver in driving organisational transformation.

The move towards EVP

Reward is becoming increasingly linked to talent management and performance assessment.

While it’s hard to define individual performance that is linked to outcomes beyond a specific job description, the best reward structures are looking more to the long-term value that an individual brings to an organisation.

For this reason reward is moving closer to a true EVP approach. No longer is total reward the buzzword in reward strategy, it’s more about full economic benefit and the opportunity for employees to contribute. This includes intangibles like an individual’s contribution to culture, team leadership and the broader strategy.

The cultural overlay is important for leaders to understand, as well as the fact that a full internalisation of an EVP can’t be achieved overnight. It often requires a cultural change and in the long-term an emotional alignment from all employees with the EVP.

“No longer is total reward the buzzword in reward strategy, it more about full economic benefit and the opportunity for employees to contribute”

As an example, take the reward applied to a sales representative. In years past their reward would have been linked to incentive payments based on revenues or volumes, i.e. did they meet their sales target? Now the most progressive organisations have moved to ensuring that they develop a longer term relationship that encourages greater creativity in developing markets and boosting longer term sales. Apart from being rewarded via wider measures, the sales person is also rewarded via the opportunity to be part of creating that long-term sales boost – an important source of engagement for sales staff.

The changing role of HR

Leaders need to understand the business strategy, value drivers and inputs into success in the long-term, as this will enhance the organisation’s ability to attract future talent. Top talent doesn’t just want to know about financial reward, they want to know what the strategy and culture of the organisation is like, how team performance is regarded, what success looks like and how they can contribute to generating that success.

Whilst the Remuneration and Benefits Manager has the role of aligning the EVP with organisational strategy and making it operational, it is the wider HR community that needs to work with business leaders to implement the approach in an integrated and co-ordinated manner. In addition, there needs to be continual feedback provided to the Remuneration and Benefits Manager on success stories, and where required, suggestions on improvements to the program.

Reward needs to be able to adapt so that workers not only have vertical career shifts, but also horizontal movements as organisations undergo transformation. The best EVP structures will have an impact on the attraction, retention and motivation of employees, and provide new challenges as well as play a critical role as a retention tool.

Integrating total rewards to EVP

That’s not to say that the total rewards model is no longer valid, it just needs to be tweaked to focus more on the non-financial aspects of the reward offer, rather than simply paying lip service to the model while still relying on pay to attract and retain talent.

Change can be a powerful tool for good when it comes to organisational transformation, and reward strategy must keep up with this pace of change. When it comes to reward, leaders need to keep the whole EVP front of mind, now more than ever.

Money doesn’t ensure retention!

Hay Group’s World’s Most Admired Companies (WMACs) research highlights that people leave organisations for reasons other than money. In fact Hay Group found that in aggregate, WMACs pay about 5% less in base pay for management and professional

positions.* Usually people joining organisations have not been able to uncover what it is like to work at the organisation before they join. Only once they have been in the organisation do they truly get to understand the value proposition on offer. For this reason, organisations need to do a better job of being consistent in developing their value proposition (warts and all) and sharing this with prospective employees up front. Those organisations with very clear and consistent value propositions have clear employer brands and are likewise likely to be consistent in hiring people that are aligned with what the organisation has to offer.

*Hay Group research 2009


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About Contributor

Trevor helps organisations and people become more effective through finding job clarity, enabling them to be the best they can be and building a motivating environment for high performance. During his consulting career, which spans two continents and two decades, Trevor has worked with a wide variety of organisations. He brings with him enormous experience to help organisations review their structures, create doable jobs and develop wide ranging Employee Value Propositions.

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