By:
Nihar Shah & Shanthi
Naresh
It is not just about the
money. It is about money well spent and about trust well-earned. This is the
good news about employee rewards. Paying people is obviously not a choice. The
crucial choice lies first in choosing to invest in building deeper bonds with
employees.
Then, it is about
allocating financial resources to nourish this bond. We have found that this
approach can have handsome payoffs for both companies and employees.
If it were only about the
money, then businesses that could pay more would retain their employees and
grow, while companies that could not would lose their people and their
businesses. Both kinds of companies would try to pay the most they could and
then would focus on extracting more from their people.
These ideas make us wince, not
because they are common place, and not because they do not work, but because
they assume a purely transactional and unnecessarily combative view of human
motivation. We have found that what works equally well, if not better, is when
companies choose to look at business as an endeavour of the heart and mind, as
an effort to create value and build a sustainable bottom line in the process.
If we were to extend the same
logic to employee rewards, then companies would make the paradigm shift from an
exchange of financial currency to a building of human connection with
one’s employees. Here, we will offer you three key ideas, and some
examples of how companies can build this connection so that all relevant
stakeholders benefit.
Choosing
between right and right for
us
Our work with international
and Indian companies suggests that the first step to building this connection is
to look at employee rewards as an investment rather than as a cost. Second, it
involves expanding the idea of total rewards to include benefits, work
lifestyles, and careers (see graphic), while ensuring that these innovations
fall within the framework of the company’s values and philosophy.
Third, it suggests that paying
the highest amount is not necessarily the best strategy. Rather, the number that
arguably matters most is the employee satisfaction score on the total rewards
package.
Rewards as
an investment
When companies
choose to look at employee rewards as an investment, they make the important
shift by asking themselves, “What are we investing in?” As part of
reaching out to their predominantly young population, one of the world’s
most popular high tech companies decided that they would build food, of all
things, into their rewards package.
They worked towards ensuring
that no employee would be more than 100 ft away from food. This led to a famous
set of cafeterias that the employees were proud of. This cannot be dismissed as
a wasteful, whimsical investment. The company believed that when the employees
have access to food they like, their productivity goes up, and their employee
feedback had indicated precisely this.
Innovation
and alignment in total
rewards
Next, when companies
choose to move beyond cash payments and embrace a concept of total rewards ,
they can generate ideas that reinforce their core purpose as a company. A
company in the pharmaceutical space has invested hugely in employee wellness and
benefits, thereby tying in its rewards programme with its mission. Or, in the
case of an international technology conglomerate, their rewards package actually
saved them a significant amount of money.
