Adam Sorensen from the WorldatWork: Communicating total reward effectively

A new survey shows employees spend nearly three hours a day worrying about their job security (Lynn Taylor Consulting 2009). With so much distraction how can organisations ensure that their employees remain focused on the work at hand? How can they continue to motivate employees when many of the tools – such as regular pay increases or stock options – are in short supply? How can HR professionals maintain morale and commitment when employees are seeing their friends being laid off? While there is no silver bullet for any of these questions, the answer to each begins in part with a deliberate and well-executed total reward communications strategy.

Conceptually, most HR professionals understand that effective communication helps motivate employees, builds commitment, and drives business performance. Unfortunately, this conceptual understanding does not always translate into action, especially during tough economic times. Many organisational leaders, fearing they only have bad or impartial information to share with their employees, actually curtail their communication efforts at exactly the point when those communications are most critical. Managers begin to pull back, the number of closed-door meetings increases, and the level of anxiety and fear among employees rises exponentially.

One of the greatest sources of anxiety among employees during an economic downturn is perhaps the most difficult topic of communication for many managers. Many employees will be asking how the recession affects their pay, benefits, and plans for retirement? This is because many organisations have not made an effort to acquaint employees with the concept of total rewards, nor to inform them of the total value found in the employer’s compensation, benefits, work-life, performance and recognition, and development and career opportunities programmes. Therefore, employees may not appreciate the exchange relationship that exists between the employer, providing total rewards that are valued by the employees and the employee, who gives in return their time, talent, effort, which brings results for the organisation.

For any total rewards strategy to have its desired effect, it must be clearly articulated and understood across the organisation. The following are three specific ways that HR practitioners can help ensure that their communication efforts are successful:

  • Clearly and consistently articulate your organisation’s total reward philosophy and strategy. Begin by identifying the goals and objectives of your total rewards programme. How do the individual elements, such as base pay, bonuses and benefits contribute to these objectives?

  • Having a clear rewards philosophy that is well articulated and well understood across the organisation makes it much easier to explain how changes in the external environment or business results have an impact on employees’ paychecks or benefit programs. Difficult times can provide a unique opportunity to reaffirm your strategy, articulate your vision, and reinforce how your reward program works in different circumstances. No one likes to communicate that there is no money available for pay increases or bonuses, but it is much easier to communicate such information if there is a strategic context that helps employees understand how these decisions fit within the organisation’s long-term plans and strategic vision.

  • Design a total rewards communication strategy that is tied to your business objectives. As with the design of the total rewards strategy itself, a total rewards communication strategy should be driven by the corporate mission, supported by the business strategy, and guided by the HR strategy. If your total rewards strategy or communications are inconsistent with your business objectives or do not reflect your business results, they will not drive the type of behaviours necessary for long-term success. For example, if one of your key business objectives is to improve profitability by linking pay with company performance, your incentive programmes and related communications should be designed to reinforce the relationship between the payouts received and organisational performance. When developing your communication strategy, think about ways to create a “line of sight” between business results and individual behaviour. Be specific about how employees can contribute to the success of the organisation and how those successes are reflected in your total reward programs and in the individual rewards that employees receive.

  • Understand your audience and adjust your messages to be relevant and specific to their unique needs and concerns. Reward practitioners should tailor their total rewards messages to different groups, especially when operating across borders or cultures. Conditions on the ground in particular parts may be much better or much worse than in other locations, and these should be taken into account when developing your communication plans. Similarly, it’s important to be sensitive to how cultural differences and expectations may impact how your intended messages are received. For example, many organisations develop a few key messages that are consistent across the organisation but then adjust the timing, delivery method, and tone of these messages to meet the unique communication preferences of individuals in different parts of the world.Nothing undermines morale more quickly than rumours or incomplete or inaccurate information.

  • Communicating total rewards concepts at a time when organisations are undertaking involuntary workforce reductions could actually enhance the survivor syndrome. For instance there is often guilt associated with retaining a job when other colleagues may be laid off due to drastic budget cuts. One of the clear advantages of having and communicating a total reward strategy that includes a variety of reward elements is that you have a much wider range of messages to share with employees about ways that your programme is relevant and benefits them even in tough times.

Although good communication is a powerful tool, it cannot do everything. Even the best communication cannot compensate for a bad business strategy. It cannot cover up badly designed programmes or create employee loyalty in a distrustful environment. However, a well-designed, well-executed communication strategy can help organisations and individuals become more effective and focused in this challenging economic environment.

Adam Sorensen, global remuneration professional, is a senior practice leader with global human resources association WorldatWork