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So you think.... you need a Reward Strategy

2nd in series of short papers on HR issues
by

Andrew Harrington

on 12 September 2012

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Transcript of So you think.... you need a Reward Strategy

Andrew Harrington
andrew.aha@btopenworld.com Tony Hatton-Gore
tony.hatton-gore@rewardhr.net Good reward strategies are: holistic, focusing on total reward (tangible and intangible benefits) and supporting broader HR strategy; related to achieving business success; and structured i.e. each element of the reward package has a defined purpose.
The overall aim is to align what people do with the business objectives, engage them by offering an attractive employment proposition, recognise achievement and thereby attract and motivate.
It’s about improving employee engagement and providing value for the business. Andrew Harrington
andrew.aha@btopenworld.com Tony Hatton-Gore
tony.hatton-gore@rewardhr.net It’s easy to lose sight of the overall reward picture especially if line managers have been allowed to recruit and reward people during periods of growth (which may have been some time ago) and we now find that the market place is considerably different. It’s probably time to sit down and take a long hard look at what we are pay people and how we wish to be seen in the market place. To do this we need to cover a number of key areas: - So, you have been reading articles about the power of reward to motivate and drive organisations to gain competitive advantage OR your thinking it’s about time you got a grip on what you pay people to do and to make you feel comfortable it’s for the right things and at the right level. Andrew Harrington
andrew.aha@btopenworld.com Tony Hatton-Gore
tony.hatton-gore@rewardhr.net You need a Reward Strategy So you think……..
2nd in a series of short papers Tony Hatton-Gore has completed interim and consultancy assignments for clients in the private, public and third sectors with his consultancy Rewardhr Ltd. His achievements are about making organisations work better by aligning human resources, reward, mobility and systems strategies with overall business strategy. He has been reward director at two global professional services firms (Arup and Atkins) and held senior reward, human resources and technology roles in financial services (Schroder Salomon Smith Barney/Citibank, London Stock Exchange, Kleinwort Benson). Andrew Harrington is a Director of AHA Human Resource Management Ltd. Since 1999 he has worked as an independent HR Project / Change / Interim Manager and Consultant undertaking assignments with small and large organisations within the UK across a wide range of HR areas. His client list includes companies such as Lloyds TSB, The Arup Partnership, British Energy, Reuters and RBS. Andrew has worked on the development of Reward Strategies and interventions since the early 90’s. We hope you have found these last few slides interesting and thought provoking – of course the key thing is to make it happen .
Whilst this short paper gives a good insight into overall process, much more lays behind (templates for stakeholder mapping, project task templates etc)
That’s where AHA Human Resource Management can help – from mentoring through to full project lifecycle management.
Contact Andrew Harrington (Andrew.AHA@btinternet.com) or Tony Hatton-Gore (tony.hatton-gore@rewardhr.net) for a free 1:1 consultation. Make it happen Andrew Harrington
andrew.aha@btopenworld.com Tony Hatton-Gore
tony.hatton-gore@rewardhr.net Analysis & Planning
start to make sense of the data you have collected, what is it telling us about the current reward arrangements, how well do they support the business strategy and direction, what are the key principles that we need to follow to ensure the Reward Strategy supports the Business Strategy. Where do we have issues, i.e. under / over paying in certain areas, inconsistent approach to allocating pay awards, issues with fairness, consistency of approach and / or equality? What are exit interviews telling us about our Reward arrangements, what are our competitors doing, where are we losing people to – is it to do with reward? Where are our applicants coming from, do we have too many, not enough are they the right type. Develop your initial development and deployment plan. Andrew Harrington
andrew.aha@btopenworld.com Tony Hatton-Gore
tony.hatton-gore@rewardhr.net Deployment
your proposed Reward Strategy has been signed-off we are ready to deploy. BUT you don’t just send out an email to everyone saying ‘We have a new updated Reward Strategy’ – the likelihood is that your Reward Strategy will contain a number of reward interventions ranging from the need to develop and deploy a grading structure, a new approach to performance management, a commitment to move towards flexible benefits, maybe changes to the pension scheme. Therefore ‘Deployment’ of the Reward Strategy is the start of a whole range of Reward sub projects that need to be connected together. At this level then deployment is all about Communications and Stakeholder Management – tell people the why and what and most importantly when changes will take place and how they will be impacted. Effective consultation can be critical - other people may think of good ideas that you have missed and anyway will be likely to get behind proposals they have had a hand in shaping. Andrew Harrington
andrew.aha@btopenworld.com Tony Hatton-Gore
tony.hatton-gore@rewardhr.net Project Set-Up
establish the projects identity, organisation and sponsorship – the outcome of this project will have a considerable impact across the organisation so we need to have clear lines of accountability and approval authority. Something as key as your ‘Reward Strategy’ needs Board / Exec level buy-in and sign-off. This is not a short term fix, but should lay the foundation of your approach to Reward for many years to come. Think about who your stakeholders are and what they will be expecting of the project, what is success and how can you deliver that, how will you keep them informed and involved in the process. Start to build up your risks, issues, and ways to remove or minimise. If you have looked at earlier publications in this series you will notice that I advocate the use of a robust approach to managing the process. As the old saying goes “Any road will get you there if you don’t know where you’re going” – some of the following may seem familiar, but the content is different Andrew Harrington
andrew.aha@btopenworld.com Tony Hatton-Gore
tony.hatton-gore@rewardhr.net (to contribute to the project – senior managers, Lead Team / Executives, Subject Matter Experts (SME’s) etc) (and is responsible for the deployment plan and hand over to Business as Usual) Implement Stakeholder Management and Communications processes Implement a Project Management Methodology (particularly integration with broader HR policies such as performance management and development) (consistent with the needs of the business and HR strategy) Andrew Harrington
andrew.aha@btopenworld.com More in the series – to come … http://prezi.com/dvid37xlivzh/so-you-think-you-need-a-new-hr-system/ You need an
Employee Manual You need to Get the
best from your HRIS You need Competencies You need to Recruit You need to Reorganise You know Your People You need a Grading Structure You need a New HR System So you think………….. More in the series – published … Identify key people from the organisation Develop a set of Reward Principles Agree the scope of the review Agree who has final sign-off What's in a reward Strategy ? Investigation
what problem are you trying to solve? Before we plot the future we need to know where we are know – this phase of the project will depend heavily on access to your people, organisation and existing reward data and metrics. How many people have you got, what are their roles, how much are they being paid and on what basis, do you have existing reward structures / grades / bonus schemes, what are the elements of your existing reward packages, are they linked to any job evaluation system / process, do you have an annual or ad-hoc approach to salary review etc, etc, is it linked to the performance review process, are staff representatives or trade unions involved. Also use this time to pull together all of the data you will need to understand the needs of the business – Company Vision, Aims, Values, Business Strategy / Plan. Development
Make use of your ‘project team’ – senior / key stakeholders / SME’s and external experts / facilitators to define a picture of the future shape and make up of your Reward Strategy. Make use of ‘strawmen’ to test the approach against your Reward Principles; don’t forget to look at the costs and impact of change. Almost without exception you will incur some cost in moving to a new approach to Reward, however this must be off-set by potential future savings OR benefits and any Exec / Board will need to see what they are. Determine the return on investment from your reward strategy and how you will measure it so that you can demonstrate success. Once you are satisfied that the story you can tell is robust and ticks all the boxes (or at least most of them), go for sign-off, but be armed not just with the proposed Reward Strategy, but also your approach and plans for Deployment. So develop your communications and stakeholder management materials and plans. Support
key to deployment, but often forgotten, is the need for on-going review, support and hand over to Business as Usual (BAU). You will have made a number of claims for the benefits of the Reward Strategy and it’s tempting to assume all is done once implementation is over and these benefits will be realised. However, you will need to continuously work to embed the changes with HR, Managers and Employees until they become familiar and expert with the strategy. Regular reporting on progress will enable you to assess whether you need to make adjustments as you go along as interventions may have unexpected results. So, have a clear view on how and who will be responsible for providing this support, embedding and monitoring as these interventions move into ‘the way we do things around here’.
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