Employee Benefits Summit 2009: Total reward under the spotlight

In the current economic climate, total reward is coming under the spotlight as employers re-examine their motives behind offering the many benefits added during the good times and the way variable pay has been used.

Speaking at the Employee Benefits Summit in Monte Carlo, Duncan Brown, reward director at the Institute of Employment Studies, said: “Some of the assumptions we have been making, pretty much unthinkingly, are now being challenged.”

In addition, he pointed out that leading experts feel many of the benefits initiatives implemented as employers strove to become great places to work are now being seen as “a lot of hot air”, particularly as the more extreme end of wacky perks. “They are really being found out now,” he added.

He emphasised that reward managers need to focus on creating a broader rewarding work environment, and not simply focus on the design of a few pay and benefits schemes. There also needs to be greater focus on fairness.

“There is a lot of evidence that fairness is key to people’s satisfaction with their pay and their attitude to you as an employer.”

For example, if there is a pay freeze it is crucial that senior management are seen to also bear the pain. “We need to show that we are not just going to follow market performance, but we are going to be fair. Processes are very important to people’s sense of fairness.

Total reward is crucial to achieving this. “Creating a fun, rewarding environment is a lot tougher than just pulling a pay lever,” said Brown.