Reward Newsletter - March 2010
RewardLink
This issue outlines the results of our latest Reward Professional's salary survey to see how salaries & bonuses have changed from 2008 to 2009. You will also enjoy Michael Rose's article on recognition. Michael is a consultant with Higher Talent Partner, our newly launched initiative for short term HR requirements.
We run a bi-annual salary survey for Reward Professionals that analyses base salaries, bonuses and benefits for 5 levels of Reward Professional. We outline below some of the results of our December 2009 survey in comparison to the results of our December 2008 survey.
The table below shows the Median Base salary for each level of Reward Professional in relation to 2008 and 2009. This shows that salaries have increased slightly over the 12 months to December 2009.
The table below shows the Median Bonus as a % of Base Salary for each level of Reward Professional in relation to 2008 and 2009. Interestingly, junior analysts have received bonus payments in the last 12 months, which they were not entitled to in 2008. Analyst II and Executives saw a decrease in bonus levels whilst Managers and Heads of Function saw an increase in bonus levels.
If you would like a full copy of the survey of if you would like to join RewardLink, please contact Natalie Ansell on natalie@higher-talent.com or 020 7283 9200.
Recognition to win
An article by Michael Rose
The single phrase that perhaps best captures the essence of recognition is "Catch people doing something right". i
The desire for recognition is an important element in employee engagement. In the late 1950s Hertzberg found that recognition and achievement (typically found together) were the most significant motivators. And Recognition keeps coming up.
The 2007 YouGov PeopleIndex found that recognition was one of five core factors that drive employee engagement. Recognition was seen as – managers and the Company make people feel valued when they have done a great job and celebrated their success. Along with good holidays and pay, recognition for good work was one of the top three most important job factors amongst generation Y employees. ii
After very considerable research with employees in a variety of industries, Gallup came up with, a 12-question survey that identifies levels of employee engagement. Results from the survey show a strong correlation between high scores and superior job performance. One of these "Q12" is, "In the last seven days, have you received recognition or praise for doing good work?"
There is also some evidence that organisations that do use recognition perform well financially. One piece of research in the US found there was a positive correlation between the positive responses to the question, 'My organisation recognises excellence' and the Return on Equity of the business. iii
There is plenty more evidence of the importance of recognition in employee engagement. It is not always easy to measure, other than through engagement surveys, but it will cost the organisation dearly if you get it wrong:
"Recently we were very busy and a few of us worked a lot of hours to help out, but you didn’t get any thanks for it. We’re just not appreciated at work. If someone were looking for a job, I wouldn't tell them to get one where I work." iv
Recognition needs to be distanced from financial reward. Recognition programmes can be an important part of reward in its very broadest sense, but recognition is as much about management development, competence and organizational culture. Recognition programmes will often be owned by the reward people, but this can just confuse things. To be effective it needs some joined up thinking to get recognition to make an impact. A recognition programme can make an impact on the recognition of people in an organisation.
But it must be reinforced by being part of the leadership and management competencies and development.
My research shows that it really is the recognition itself that has the impact and makes the difference, not the gift. In fact there is a danger that if the 'gift' within a recognition programme is too large it can take on a life and value of its own unconnected with recognition. For example, I have come across a 'recognition scheme' with awards of up to £2,000. The Company reported that it appears that some managers are using the scheme simply as a route to getting more money for their people when the pay and bonus review was very low. This completely misses the point of recognition.
In another organisation I worked with, when asked what was the most important part of the recognition programme, managers involved said that it was the tangible award – in this case cash through payroll. However, when recipients were asked the same question, they almost all said that it was receiving the letter acknowledging their achievement. A typical comment was, "I have worked here for over 20 years and this is the first time anyone has ever thanked me for something I have done". This example is helpful in three ways:
- it demonstrates the power of the recognition itself;
- it illustrates that managers often misunderstand the motivation of their people – believing extrinsic tangible awards are the dominant motivator, and
- it suggests that using money as the tangible award can confuse the recognition message.
Emphasis on the tangible award diverts attention from the more challenging behavioural change required – to look someone in the eye and acknowledge their achievement in a clear positive and open way. Many people find this difficult and find comfort in hiding behind the award.
Where awards are used in recognition programmes – and I do believe they should – I would always advocate non-financial awards rather than money. Perhaps paradoxically, spending less can deliver more. As we saw above, money confuses. Recognition programmes are an adjunct to reward, but they are different. As Rosabeth Moss-Kanter says, "Compensation is a right, Recognition is a gift".
Non-financial awards also have more 'memory value' - they can be appreciated and remembered long after the monetary equivalent will have been spent. You can make a non-financial award more personal and they can also have a higher perceived value than cash.
There is also the danger that with an award led programme people could feel that they could not recognise someone if the budget is running low. This is a critical issue; you cannot limit recognition to a quota.
People get sidetracked by the nature of the award rather than the underlying behaviours that the programme is trying to support. The danger is that a recognition scheme is designed around the awards rather than around the behaviours. It is easy to react to the perceived lack of recognition in the organisation with top down centrally led programme. Recognition can go from the very informal – ‘thank you’ to the very formal – employee of the year type scheme. My view is that it is best to start at the informal end – start local and keep it simple. Whichever approach is taken, if recognition is on the agenda, it is important to embed it through other HR programmes such as leadership and management competencies and learning and development.
Ed Lawler believes that, "People respond to something that costs little or nothing, and that something is called recognition".
As with all other initiatives there is no single best practice model to follow, instead there is a need to really understand what you are trying to change, or what is missing before introducing a recognition programme. It can also be difficult to demonstrate the impact in a measurable way. However, if the organisation conducts some form of employee engagement survey, it can be used to monitor change in views on how valued people feel.
But you cannot just ‘do recognition’ by introducing a recognition programme. A recognition programme is a valuable vehicle and can start to give some strong signals about 'what's important around here', but it needs to be well thought through to meet the particular needs in the organisation and linked with other programmes, policies and initiatives to ensure consistent messages are delivered.
Michael Rose is an independent consultant and one of the Higher Talent Partner Consulting team. His first book on recognition, 'Recognising Performance' was published by the CIPD and is available on Amazon. Michael is currently working on his new book on recognition and non financial reward due to be published by Kogan Page in February 2011.
i Blanchard and Johnson, The One-Minute Manager, 1993.
ii Personnel Today / Ipos Mori, September 2008
iii 26,000 employees in US healthcare organisations. Recognition Pays: Discovery White Paper, O.C. Tanner / The Jackson Organisation, May 2005
iv Working Life: Employee attitudes and Engagement Research Report, Kingston Business School, CIPD, 2006
Latest Higher Talent News
Employee Engagement Workshop - 17th March 2010
Higher Talent and The Scala Group are running a Breakfast Workshop on Employee Engagement from 8.30 am until 10 am in the City of London. This is the first of a planned series of events to address the key areas that emerged as "high on the HR agenda" from the International HR Barometer. We will be discussing issues such as: how do you get buy-in from the senior management team; who are the stakeholders; what parts do resourcing, reward and talent management play in the employment agenda. Alison Hughes of Higher Talent, Michael Rose of Rewards Consulting and Janice Caplan of The Scala Group are the expert panel. If you would like to attend this free seminar, please email richard@higher-talent.com.
Higher Talent Partner
In January Higher Talent launched "Higher Talent Partner". This initiative ensures that we are able to service our clients HR resourcing requirements in the long, medium and short term by giving them access to our select network of HR specialist consultants as well as our usual permanent and interim candidate options. Our consultants have experience in developing and implementing HR strategies, designing reward structures, developing leadership talent, managing employee relations and providing generalist HR support. All our consultants are professionally qualified, have blue chip experience and come with high calibre references and recommendations. If you would like to find out more about Higher Talent Partner, please email rob@higher-talent.com.
LTI Training
We recently ran a training course aimed at Reward and HR professionals wishing to gain an understanding of the basics of long term incentives. At the end of the course, the delegates had a clear understanding of the purpose of long term incentives including their place within the total remuneration package, the operation of the most common types of long term incentive plan, the key design considerations when introducing a long term incentive plan, cost considerations and the key steps in the implementation of a long term incentive. Feedback was universally excellent. We will be running this course again later in the year. If you would be interested in attending, or sending a member of your team, please email richard@higher-talent.com.
Some of our HR / Reward Candidate Profiles
Higher Talent continues to work with high calibre candidates whom we source via proactive networking. This means that we have access to candidates that are not active and therefore not available through other recruitment consultancies. We are currently representing Reward candidates in all disciplines including generalist reward, executive compensation, share schemes, benefits, pensions and payroll.
To download and print this newsletter, please click Higher Talent Reward Newsletter.
HR Jobs | Reward Jobs | Compensation & Benefits Jobs
Higher Talent continues to work with top performing organisations with best practice HR and Reward teams. New clients this quarter include large investment banks, HR consulting firms and other FTSE-100 organisations. Higher Talent clients benefit from our focused and candidate-led approach. You can be assured that Higher Talent represents your role and company in the best possible light in the marketplace. Please click to view our current HR Jobs | Reward Jobs | Compensation & Benefits Jobs.
If you are interested in any of the above HR roles or HR candidates please do not hesitate to call on 020 7283 9200 or email alison@higher-talent.com.