Get smart - measure and reward success holistically
Employers that fail to measure and reward success holistically could be damaging their company's long-term health, says Mercer human capital principal Martin Turner.
Decide who gets - and who deserves - whatTurner says that in 2010, the talent shortage will become more evident, and retention will be increasingly important. Employers will not necessarily need to increase salaries, but they will need to be "smarter" with their allocation of benefits.
A holistic approach to rewards means really getting to know your workers. What an "ageing baby boomer" is looking for will be different now than it was fifteen years ago, and what Gen X and Gen Y workers want will be different again. Reward programs that have been around for a decade or more will be out-dated and potentially ineffective.
"An offering of cash, super and subsidised health insurance" is probably not going to be very attractive to your typical Gen Y who is more likely to be interested in flexibility, the capacity to move quickly through different roles, and opportunities to enhance their CV, Turner explains.
"Segmentation" helps determine not only who is offered which rewards, but also how they are distributed, Taylor says.
"Look at segmentation and ensure there is adequate differentiation between the 'better' employees and the 'okay' employees. That's a consistent message that comes through from employee-engagement surveys. Employees are looking for differentiation."
Executives should be no exception. Individual rewards must be tailored "so there's a balance between executive's self-interest and the protection of shareholder interests." It is not just about what the employee wants; it is about balancing those two interests.
Finally, be "up-front" about rewards and benefits, Taylor says. Communicate frequently and openly. Organisations that are more open in their communication typically enjoy better levels of employee engagement.
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