The Need for Reward Innovation. Jon

Transcription

1 The Need for Reward Innovation Jon Ingham 1

2 Jon Ingham Worked as International HR Director for Ernst & Young / EY Also as Director in Human Capital Consulting for Buck Now independent consultant, based in UK, working globally Interested in people strategy and innovation Blogger at 10 year old site Strategic HCM Co-author with Dave Ulrich of Building Better HR Departments Author of The Social Organization (available to buy in bookshop) Contributor on reward to two ATD books on talent management Introduction 2

3 How likely are employees to recommend your company to a friend based on its rewards package? What we discovered in Bersin s first High-Impact Rewards survey is troubling: The NPS of employee rewards, which we calculated from more than 1,100 survey responses, was negative 15 ( 15) Source Problems with Reward 3

4 Dan Ariely / Stephen Dubner Value of Social Contracts Problems with Reward 4

5 Lynn Stout - Pay for performance promotes selfishness and reduces prosocial behaviour Problems with Reward 5

6 Recruitment Learning & Development Performance Management Internal Communication Changes in Other Areas of Talent Management 6

7 Value in Transformation 7

8 Create value Performance Leadership Build capability and engagement to create new opportunities for the business Discretionary rewards and recognition Add value Performance Alignment Ensure each individual is contributing to the business Provide bonus or increase challenge in objectives (reflect in size of job / pay) Value for money Performance Administration Help people deliver in their jobs Base pay Source: Value in Transformation 8

9 Group Based / Peer to Peer Reward 9

10 IGN Entertainment has developed an innovative system where it's the employees themselves who help decide how much should go to each worker. It's called "viral pay. Twice a year, in January and July, IGN creates a basket of tokens (called "Tokens of Appreciation ). It distributes the tokens among employees and has them give their tokens which are worth $1 each to whatever other employees they want. Source Group Based / Peer to Peer Reward 10

11 SMAC technologies Newer digital systems including talent and contingent worker platforms Further disruption likely eg Blockchain More interest in meaning and self-actualization (not just Gen Y) Less loyalty but remaining interest in longer tenure if appropriate opportunities can be provided Pressure on living wage and concern over executive pay Increased focus on skills and tasks vs jobs Greater variety of contractual arrangements Need for groups of specialists to meet complex and systemic organizational problems Reducing hierarchy and increased use of teams, communities and networks Greater transparency (Glassdoor, Payscale, Linkedin etc) and need for strong employer branding Possible moves towards Universal Basic Income A Changed Context 11

12 1. What innovations have you implemented in your reward practice? 2. Where do you see major opportunities for further transformation? 3. Do you think Reward functions have been sufficiently innovative?, and if not, what can be done to increase openness to innovation in the future? Discussion 12

13 Business strategy Divergent thinking Convergent thinking Strategic objectives and principles Identify options, pros and cons Implement solutions Review & enhance And manage trade-offs The Basis for Innovation 13

14 Netflix: Goal is to keep each employee at top of market for that person Market compensation always applies and top of market comp is re-established each year for high performing employees At annual compensation review manager has to answer the three tests for he personal market for each of their employees: What could person get elsewhere? What would we pay for replacement? What would we pay to keep that person if they had a bigger offer elsewhere? Source: Netflix Market Based Reward 14

15 Reward objectives, eg: Recruit, retain, motivate Market competitiveness Level of decision making (hierarchy not going away completely) Flexibility across roles Contribution to groups and whole organisation (social talent) Reward principles, eg: Total Rewards Intrinsic vs just extrinsic motivation (eg recognition) Internal and external relativities Strategic Reward Objectives and Principles 15

16 Optimizing current approaches: Informing vs just supporting financial budgets Focusing differentiation on top social and critical to retain talent Focusing progression on smaller number of meaningful grade changes (and dual / multiple careers) Enabling managers to make pay decisions more flexibly Personalizing reward Communicating approach and value of reward ( Never reward without recognition ) Pay transparency and reduced differentials Team / group based reward More extensive use of technology, data and analytics Potential Reward Activities 16

17 Contingent workforce: Hired per task and paid on task completion (perhaps on Blockchain?) Rates often kept low through competition on a gig working platform, though with some account taken of quality too (perhaps through social recognition measures) Works best for tasks which can be separated from other work and described objectively Core, retained workforce: Focused on more complex activities, requiring group work and investment in relationships Social talent = connectors, energizers and network brokers Often less easy to measure quantitatively Even more focused on intrinsic motivators Group based financial rewards (or individual rewards that do not impact group working) Avoiding social loafing Need for equitable vs just equal reward Core and Contingent Workforces 17

18 External orientation Horizontal teams Networks Internal orientation Simple groupings Communities Task focus, Extrinsic motivation Human focus, Intrinsic motivation Teams and Other Groups / Networks 18

19 External orientation Internal orientation Horizontal teams requiring deep collaboration. Variable pay based on team performance and individual s contribution to team Simple groupings of people working largely individually. Main motivators base pay and functional progression Task focus, Extrinsic motivation Networks of individuals cooperating with each other. Funding based on friendly competition between network members Communities cultivating relationships between members. Investments in things members are passionate about Human focus, Intrinsic motivation Group Based Financial Reward 19

20 Players & motives Business context Changes in behavior/ motivation Game mechanics Games Gamification 20

21 1. Which of these or other changes offer the greatest opportunity for improvement or transformation? 2. What steps need taking to introduce these innovations? Discussion 21

22 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. Source Experimentation 22

23 jon.com About me: joningham.com About my business: strategic-dynamics.co.uk People: strategic-hcm.com / strategic-hcm.blogspot.com Organisation: organization.social linkedin.com/in/joningham twitter.com/joningham Phone: For More Information 23