In case you haven't seen it, I thought I would share some highlights of the 2009 Hay Group and WorldatWork "Reward Next Practices" report, which came to my attention yesterday. The report is a look at "the future of reward programs" and is the outcome of a survey of 763 organisations in 66 countries, typically multi-national organisations of $1 billion or more in revenues, supplemented by interviews with a further 30 large multi-national companies. So I guess you could say it gives a pretty good idea of what these companies are thinking and hence of future directions, especially since it specifically included assessment of what is important now compared to what will be important in the future.
So what does it tell you that you need to know? Well, it begins with the totally unsurprising statement that "Reward executives are first focusing on better aligning labour costs with new economic realities, then preparing for future growth when the economy improves." As if, in the present economic climate companies would be doing anything else. You hardly need a report like this to tell you "The main concern for the next year will be to manage employee expectations and maintain engagement in the face of constrained financial rewards and the threat of job losses."
However, it did get better. Some key findings were:
- A more holistic view, placing increased emphasis on strategic alignment of reward programs and aligning them internally. (I wonder whether that means the big banks will stop seeing their investment banking arms as separate entities and rewarding those people on a scale that can only antagonise the rest of their people?)
- Better aligning pay and performance, including:
- Ensuring the right performance metrics are in place
- Achieving the appropriate balance between short-term and long-term measures
- A balance between the right types of measures
- Aligning employee behaviours with long-term strategic goals and financial performance measures. There is likely to be a substantial shift towards long-term measures.
- Viewing reward as an investment not a cost
- Implementing strategies and programs that can be consistently applied across all areas of the organisation. This, however, does not mean a "One size fits all approach." (I suppose this answers my earlier question about the banks.)
- Greater attention to employee engagement
Even though the consensus is that "reward programs will likely see an evolution rather than a revolution over the next two to three years," there are two particularly encouraging aspects to this report.
- The tacit admission that reward programs have not been well managed in the past.
- These issues and proposed solutions all reflect things I have been saying for the past 6 years and thus confirm that Zealise does offer a realistic, effective, solution for those who are willing to look up from the pure "aligning of costs."
Nevertheless, I would still be interested to know what your reaction is to these findings. Please add your comments and thoughts.