The following stories are inspired by 2 real-life incidents. The names and situations have been changed to respect and protect the privacy of the individuals concerned.
Avik has been the star performer at Big World Corporation from the time he joined. He clearly remembers the day BWC had come to his college campus to hire fresh talent. He was selected after a rigorous screening and interview process and offered to join immediately. For the last 7 years, the organization provided him all that he could wish for– career growth, international assignments, and steady income growth.
As he walked out of the exit interview meeting room today, he thought about the journey and how he now wants to take the leap of faith to pursue his passion for music. He kept thinking about his father who received a long service award last month for 30 years of continuous employment with his organization….
“I wanted to share with you Rahul”, Riya said, “I am expecting a baby. Due to my health, the doctor has advised me bed rest so I will not be able to come to work at least for the next 3 months. But I understand that we are in the middle of delivery of the project for our critical client, so I am open to working from home to meet the project delivery schedule”, she stated. “Congratulations Riya! I am very happy for you and your family. Of course, your health is a priority and thank you for offering to work from home to deliver the project”.
Riya not only delivered the project but also a healthy baby 6 months after this conversation. Another time, another world, this conversation would have meant the end of her job and eventually her career.
What is common about the 2 scenarios?
We are talking about employees as humans with intrinsic and extrinsic needs rather than purely output producing machines. Organizations are now restructuring their rewards strategy – the pay for output has now given way to war for skills where the ability to attract, engage and retain top talent provides a competitive edge. The modern-day organization’s focus on culture and ethos can be directly related to the evolution of technology. In the digital era, the whole world is now one big market. In this context, an effective Rewards Strategy is the ticket to enable any organization to meet its strategic objectives. No wonder, most progressive organizations continue to Re-think their rewards strategy to adapt to the changing business needs and dynamic socio-economic environment.
Bake your cake and eat it too!
A flexible and fluid rewards program is more efficient than a one size fits all standard rewards structure. Letting the people select and modify the ingredients of a pay mix to bake their ideal reward structure is more valued than a peanut butter spread. Hence, while diversity, openness, collaboration, and boundarylessness have become the vital pillars for business success, organizational culture has become the center point enabling this success.
In my view, the rewards strategy based on a rich blend of creativity and communication can have a direct impact on the organization’s culture and thereby success. Both these elements have to be carefully measured and work in harmony to bring about the best out of any Rewards Program and drive the culture.
This defines the what and why of the rewards philosophy. Rewards strategy needs to be able to make a real difference to the lives of the recipient in order to be valued. A good combination of science and art optimizes the return on investment and maximizes the value proposition of rewards. Flexibility in work hours, add on benefits for insurance schemes, sabbaticals to pursue hobbies, pets at work are all great examples of how far we have come in building an inclusive and stimulating culture. More organizations are now realizing that a good combination of intrinsic and extrinsic rewards builds both rational and emotional commitment from their internal customers thereby creating a mutually beneficial equation of trust and belongingness.
This is the how and when of the rewards philosophy. The impact of effective communication in any relationship can never be undermined. A Rewards strategy that is transparent and timely goes a long way in building trust and relationships within the organization and strengthens the culture. In today’s world and age, where Artificial Intelligence is not only contributing but also augmenting the success of most of our businesses, the role and future of Rewards are at a crossroads of opportunities. Communication has become almost real-time and connections have gone beyond the boundaries of the regions. Technology has also made information easily available and portable. Online Total Reward statements, chatbots to answer standard queries around benefits, portals for pay mix enrolments and exits, are all examples of how transparent and timely communication can increase efficiency and build trust.
Reward by definition is “a thing given in recognition of service, effort, or achievement.” From a business perspective, the meaning further broadens and touches gratification which has a deeper connection to the basic human needs and purpose. Over the years, various theories and structures have established a direct and indirect correlation between Rewards and an Organization’s growth. These theories have evolved with time, however, they are still the foundation of modern-day workspaces.
In 2010, World At Work completed a study to gauge the impact of five rewards (compensation, benefits, work/life balance, recognition, and development/career opportunities) on employee attraction, motivation, and retention. While development opportunities significantly impacted attraction, the most important rewards used to drive intrinsic motivation was satisfaction with work/life balance and performance recognition.
As per IBM’s recent study on “Financial Impact of a Positive Employee Experience”, there is a direct link between employee experience and retention, discretionary effort, and work performance. Below are some findings from the study:
- Organizations that score in the top 25 percent on employee experience report nearly three times the return on assets compared to organizations in the bottom quartile.
- Organizations that score in the top 25 percent on employee experience report double the return on sales compared to organizations in the bottom quartile.
- In the past five years, Google searches for the term “employee experience” have increased by 130 percent.