Reward Philosophy Considerations in the Hybrid Workplace

Reward Philosophy Considerations in the Hybrid Workplace
A recent Gallup survey in the US found that 5 in 10 employees want a hybrid work arrangement, 3 in 10 want to be on-site, and 2 in 10 want to be fully remote.

Reward Philosophy Considerations in the Hybrid Workplace

Long-time advocates of remote working are out in large numbers to prove they were always right about what the future working model would resemble. The pandemic has put the wind in their sails and the weight in their argument. Organizations have woken up to the new normal and are evaluating the efficacy of their current business processes.

While 2020 was about business continuity for many, the current year is all about reimagining and reshaping working models to reignite sustainable growth. As organizations try to establish their position in the remote vs in-office spectrum there is an increasing focus on the reward approach that aligns with a hybrid workplace model.

Reward Philosophy

when reward as a function assumed its rightful strategic importance the scope was limited only to compensation and benefits. Over the years thinking on reward philosophy expanded to include career development and well-being. The pandemic has perhaps pushed for a strong case for the classic reward philosophy to embed workplace as the fifth pillar.

A recent Gallup survey in the US found that 5 in 10 employees want a hybrid work arrangement, 3 in 10 want to be on-site, and 2 in 10 want to be fully remote. Most other pandemics hit countries have found employee preferences move in the same direction. How does this change the scope of the different constituents of a reward philosophy?

Fig: The “modified” classic reward philosophy


From an employee perspective, this would mean having the choice of location both in-office and remote, long-term sustainability of the preferred working model, and support for remote workplace set-up. For employers, the challenge would be to create the optimal virtual working environment that keeps the workforce engaged.

While many organizations are still testing and molding their workplace strategy some have thrown down the gauntlet and are moving fast towards the hybrid model. Creation of more remote roles including fully remote teams in certain functions despite the availability of top-notch campuses are testament to even the mightiest of employers taking the plunge.

Compensation & Benefits Mix

Employees are incurring higher personal expenditure on building and managing home office infrastructure to minimize disruption to work. In addition, workplace benefits like meals, onsite recreational facilities, and gymnasiums that became an integral part of daily life for many have turned into self-funded personal endeavors.

Company-provided transport, commuting allowance, onsite food coupons amongst other allowances are less relevant in a remote or hybrid set-up. Wellness benefits have seen a high uptake and cost of living adjustment has made a strong comeback in the annual compensation adjustment framework. Differentiated compensation structures with components tailor-made to align with the working model are becoming increasingly relevant.

While base pay will continue to be determined by the relative worth of the skill set and variable pay by performance, ancillaries like utility allowance, technology support, wellness allowances, and annual home office improvement grants are gaining increasing prominence. For in-office employees the template continues to include allowances and benefits that make the physical workspace as attractive a proposition as before.  

Career Development

In addition to the change in expectations around compensation and benefits employees are placing a greater emphasis on career development.

Remote working has brought workers closer to organizations that presented them with the desired opportunities in the past but were locationally impractical. There are more avenues to fulfill career aspirations and growth is not dependent on sharing physical work floor with your manager.

There is a bigger push for leaders to embrace the remote working model to eliminate any bias towards in-office employees. Assessment of merit needs to be independent of the working model and remote working opportunities should not be packaged as a reward by itself.

In absence of in-office classroom training opportunities employees are asking for more virtual interventions. Ed-tech is fast gaining prominence to offer a seamless virtual learning environment to employees and is being leveraged as an evolving element of the self-managed employee learning journey.


Remote working has blurred the definition of a standard workday. This has given rise to instances of burnout with employees experiencing both physical and mental well-being challenges.

A Gallup panel study conducted earlier this year to measure employee view of leadership care for their well-being showed a decline from 50% in May 2020 to 37% in February 2021.

Protecting vacation time and disconnecting from the workplace is being increasingly encouraged and leaders are genuinely walking the talk on this.

Flexible working arrangements for primary caregivers are becoming the norm and technology is being leveraged to keep employees posted on avenues to recharge. 

Beyond the constituents of the modified classic reward philosophy, quality of work, relationship with peers and superiors, interaction with stakeholders, and a sense of belonging assume greater importance in the hybrid working model.

The swanky cafeteria and the view from the top floor of the skyscraper ogled at by every aspirant may cease to be part of the employee value proposition.  


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.