More employers focus on staff engagement to measure success of reward

Most employers plan to increase their focus on employee engagement when measuring their reward programs during the next two to three years, according to a new study by Hay Group and WorldatWork.

The research shows that more than half (57%) of companies intend to focus on engagement in the coming three years, while 64% intend to increase their future focus on the motivational value of reward programs.

According to the study, current reward program performance metrics are more heavily weighted toward financial performance than employee engagement. The majority (71%) of respondents focus on using financial performance measurements, while 40% focus on employee engagement.

Colin Evans, UK head of reward services at Hay Group, said: “The global downturn has prompted organisations worldwide to shift to an increased focus on how to engage and motivate employees.

“However, during times when budgets are tight, maintaining an engaged workforce is more difficult than ever. When times are tough, employers are looking for ways to improve engagement – and it’s essential they remember the motivational power of intangible rewards, the role of the line manager in establishing a great work climate and the importance of communicating effectively with employees.”

The study also found that more than half (57%) of companies plan to ramp up their future focus on regularly measuring the return on their total reward investment, while only a fifth (20%) of respondents currently regularly measure the return on their reward investment.

Other key findings from the Reward Next Practices Survey:

  • Close to half of the respondents (44%) plan to increase their future focus on using reward to reinforce a culture of creativity and innovation, while creativity and innovation is a current focus for only 25% of companies.
  • Two thirds (67%) of respondents will focus more on improving the ability of their line managers to effectively manage the overall pay-for-performance relationship with employees, and on the role of line managers in communicating total rewards to employees.
  • More than half (57%) will increase their focus on managing pay holistically at a total remuneration level (as opposed to managing reward elements separately and independently).
  • Leveraging important non-financial rewards, such as career and development opportunities (60% greater focus), improving work climate (53% greater focus) and non-financial recognition (52% greater focus) will be key components of reward programs of the future.

The Reward Next Practices Survey surveyed approximately 763 organisations in 66 countries from a cross section of industries to determine the reward practices of global organisations during the next two to three years.