Communicating reward – is anybody out there?
Communicating reward is the key to successful reward and benefits programmes. Here Duncan Brown, director of reward services at the Institute of Employment Studies, discusses employers’ growing recognition of the importance of benefits communications and assesses what employers are – or rather should be – doing to get benefits communications right.
“Total reward is all about communications.”
“You simply can’t over-communicate.”
“If we were making pay changes again, we would definitely
put more effort into the communications.”
“It’s all in the communications.”
“Communications is key.”
In preparation for a new book about reward effectiveness – what it is, how you measure it and how you improve it – I have quizzed HR and reward directors. Their responses – as is evident from the above quotes – mean it has rapidly evolved into a book about reward communications.
Or rather lack of communications. Nobody seems to think they are very good at it, and everybody thinks they should put more effort into it. They’re right, of course.
The research review completed for the book is pretty depressing for those who make a living designing new reward schemes. It shows that no type of pay, bonus or benefits plan is universally successful or unsuccessful. Rather, if people understand, trust and believe that a new scheme is going to work, then it’s very likely that it will. Rewards, it seems, are a self–fulfilling prophecy and what truly matters is process and practice, not plan and policy.
The most common reward design changes over the past decade – flexible benefits and ever–more–complex performance pay systems, for example – all increase the requirement for well–informed, knowledgeable employees to understand how they are being rewarded, in order to support their recruitment, retention and engagement.
So, is the situation improving? The CIPD’s annual picture of reward management in more than 500 UK organisations paints a depressing, if accurate, picture. The drive for HR to access the boardroom is apparent, with over 80% discussing reward policies with directors. But fewer than half bother to consult line managers about reward changes, and more involved outside consultants than talked in advance to employees.
The pattern of reward communications with employees, as evidenced by the CIPD survey, makes interesting reading. Individuals get loads of communication when they join an employer. Arguably this isn’t the most appropriate timing as employees receive huge amounts of information from learning their role to learning where the toilets are and how not to lock themselves out of the building. Post induction communication rapidly declines to a trickle – essentially only via your monthly pay slip – and is only likely to pick up again when you leave the business.
For many employers, reward communications are akin to ‘crash’ language courses: very intensive for a short period and after a few weeks you can’t even remember which language you were learning! The result, according to the CIPD, is that pay is a bigger cause of dissatisfaction at work than job security and only 10% of employees feel fully informed. The one glimmer of hope in the CIPD data is the 23% of employers who provide or are considering total rewards statements for their people.
So, what are employers doing about communications? Entries I judged for a recent employee benefits communication award highlight the frenzied communication activity many employers undertake on websites and Intranets.
Yet uploading a reward policy manual to the Intranet is a long way from really improving employee understanding. And all too often employers choose to bypass line managers and email employees directly about benefits rather than involve them in engaging people with reward.
Neil Blackshire, Benefits and Compensation Manager at McDonalds, regularly mentions communications when discussing the effectiveness of their reward arrangements. Here, every employee receives an annual total reward statement to emphasise the breadth and value of their reward package. This was rolled out progressively, initially covering senior managers, followed by the management population and then all staff. Interestingly, the company has recently reverted to a paper total reward statement that is sent directly to employees’ homes.
Communication has improved markedly in the last four years, according to Blackshire, helping to attract and retain better staff with a reward package that was already good but under–sold. And the results are clear: among hourly paid staff 77% agree their pay and benefits are competitive and 80% that they are respected and recognised for their work. The proportion of committed staff increased to 84% in their 2008 survey.
But, remove they’re not alone. According to the Hay Group’s research, Fortune magazine’s Most Admired Companies do a better job than the rest of us at communicating their reward programmes, and they use regular rewards statements as one of the vehicles.
So there you have it. Most of us have employee surveys already, and with more regular reward communications for employees, as well as a bit of line manager involvement and training, we can all progress towards the sorts of totally rewarding and engaging workplaces that we aspire to create.
