Dr Jonathan Trevor: Global reward requires complex design

39,40, Viewpoint- Jonathan Trevor

The challenges of managing reward are considerably underestimated by many outside of the human resources function. It is much easier to get it wrong than get it right. When managed poorly, reward can demotivate, disengage and disenfranchise people very quickly and make headline news when the cause of value destroying behaviour. When managed well, it can only complement all of the many things required to ensure people are behaving and performing in the right way to support the organisation’s strategic direction. Moreover, the complexity of designing and managing reward increases exponentially in multi-national operations.

To navigate the challenges of managing reward for value, key considerations for global reward leaders must first include the business strategy: what is the strategic context for reward decisions, especially in terms of the behaviours and strategic focus required of [their] people? 

Second, reward philosophy: how does the firm approach the governance of global operations and how is it seeking to influence the effort, focus and behaviour of its people? 

Third, business intelligence and decision-making: how does [an employer] ensure [it has] complete business information about global and local market activity to ensure the best possible fit between reward systems and the business models they are supporting?

Next, manage the people that manage people. How does [an employer] engage people managers throughout the organisation to ensure they are effective at managing performance and making meaningful the firm’s effort and reward bargain with employees under their care? 

Finally, sell the opportunity: how does [the employer] craft an employment narrative that leaves each and every employee in no doubt about the answer to the question: ‘why should I want to work here?’

This final point has nothing to do with money. It has everything to do with alignment between the organisation’s purpose, its values and its people. If its purpose does not appeal to the idealistic motives of its people, they are the wrong people. No reward system, no matter how generous or sophisticated, will ever make good that deficiency. The greatest weapon in an organisation’s arsenal is a mutually rewarding work experience that allows both employee and employer to achieve their full potential to do something worthwhile together.

Dr Jonathan Trevor is associate professor of management practice at the Saïd Business School, University of Oxford