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Five ways your reward strategy can support your organisation’s purpose, values and culture

It’s no secret that employees need a sense of purpose to rally behind and provide direction. Simon Sinek has preached this in his books, particularly Start with Why, for some time. Likewise, company culture has been at the forefront of many articles; hailed as the secret for employee engagement and company success. These are all well and good, but what do they mean in a practical sense? As reward leaders, let’s look at what we can do to affect this change.

Man on a ladder graffitiing a wall

If your organisational purpose and values are going to succeed, they must be reflected in company strategy and behaviour throughout the organisation. This is what will create the culture that supports it. One of the key aspects of this is the reward strategy, something you can influence and impact as reward leaders. Below are five areas to connect your reward strategy to the company vision.

1. Start with behaviours and values when designing your reward strategy

There are many aspects of reward, but rather than approaching it from the perspective of what you provide, you should start with the behaviours you are trying to encourage. If your behaviour/values are items such as innovation, game-changing, integrity, honesty, teamwork or passion, think about how your approach to different types of reward either supports or conflicts with them.

Consider both extrinsic rewards (pay and allowances, bonuses, benefits, one-off rewards etc) and intrinsic rewards (recognition, personal development, promotion) and how each fit into the behaviours. This approach will also help highlight where you don’t have a reward element supporting a particular behaviour and you need to change or introduce something new.

2. Document, measure and re-evaluate

You need a high-level and visible summary of your reward strategy, the behaviour you are encouraging and which elements of reward are supporting each behaviour, as mentioned in point one. The next step is to consider how you will measure the effectiveness of your reward strategy in encouraging the behaviours and what the target is. It can be difficult to identify these metrics but it’s important so you understand what’s working and what isn’t. At a minimum, a well worded survey to all employees, exit interviews and interviews with different members of staff and Glassdoor reviews can give you qualitative feedback.

Your reward strategy should be a living document and process, and reviewed on a frequent basis. This will enable you to react to feedback, correct areas where it isn’t working and keep improving it. Having this document also provides you with a focal point to involve stakeholders around the business to get the buy in needed.

3. Make sure your reward strategy is about more than just money

When people think about reward, their initial thoughts are largely about salary and bonuses. Referring to Maslow’s hierarchy, this focus provides people with the ‘safety’ level but doesn’t fulfil the higher needs of belonging, esteem and self-actualisation, which is where a lot of the behaviours company’s want to encourage exist.

You need to make sure that your reward strategy is wider than just hard cash. When looking at the behaviours you want, consider other types such as your benefit scheme, recognition schemes or personal development and training – which can include people internally sharing their skills outside of conferences or training. Be wary that whatever you set out is genuine and committable. For instance, I’ve seen companies hand out grandiose job titles as a reward that come to mean nothing when everyone becomes ‘director of something’, but their work hasn’t changed!

4. Money is emotive, make it fair and transparent

Pay can be a very emotive topic and there usually tends to be a hush hush approach to salary and bonus. It’s crucial you get this part of your strategy right as it can have a detrimental effect on an employee’s engagement with the company. Aspects to be careful about include:

  • Unrealistic policies: some companies have policies banning employees discussing pay with each other which can be in direct conflict with values like transparency, or honesty. There also tends to be some belief, and some evidence for the fact, that loyal employees earn less than someone who has jumped between jobs because of the need to attract new staff – even when they have the same skills and experience. Having a fair and clear structure can help address this.
  • Salaries you are not able to defend: provided employees feel they are being treated fairly, getting pay rises and being rewarded for good work, there usually isn’t any damage caused. If, however, the company is struggling but the reward for senior executives keeps increasing, while more junior employees are not receiving pay rises, this will damage the behaviours and culture you are trying to create.
  • A gender pay gap: the recent reporting shines a light on gender inequality. It’s an area that everyone needs to be working on and this will quickly highlight if you aren’t living up to your reported brand, culture and values.

One solution to all the above could be to pay everyone the same salary as Gravity Payments implemented. This does, naturally, present its own challenges!

5. Do as you say and keep it fair for all

Setting out your reward strategy to support the company purpose and values doesn’t mean everyone will get the same pay or benefits. There will be differences in reward for those doing a great job and hitting their (purpose and value influenced) objectives. However, you need to ensure that you keep it fair for all. Creating bespoke salary and bonus packages which introduce inequality between people doing the same role will cause friction. Examples include new hires getting different benefit entitlement for medical insurance or a different commission scheme for salespeople doing the same role. Differences like this can detrimentally affect your culture and everything you are trying to build, so stick to your guns.

If you want employees to buy into your company purpose and values and create the culture to achieve this, all parts of the organisation need to align to these. Challenging what you do and why you do it, and drawing up clear goals for your reward approach will help, as will being wary of undermining your good work. Go forward as role models. Use your strategy to live your values and let the rest of the business follow.

Written by Alistair Dunn-Coleman, head of product at Zest Technology.

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