Need to know:
- Line managers can provide essential insight and employee feedback to aid the design of a reward strategy.
- If line managers are involved in a reward change management project, they can act as advocates when communicating changes to employees.
- Line managers can play an essential role in supporting employees’ health and wellbeing, by being the first point of contact and disseminating information about relevant benefits.
Today’s line manager is often an employee’s direct point of contact for all people management, performance and reward-related issues and communication. The role has broadened out somewhat from the definition formed in production and manufacturing industries in the 1970s and 1980s, to include a focus on HR issues as well as specific function operations and supervisory responsibilities. But how much input and influence do they have on an organisation’s reward and benefits strategy?
It very much depends on the individual employer and the industry sector, says Manesh Patel, senior benefits consultant at Aon Employee Benefits. “The strategy depends on the culture of a business, and the goals and objectives that the business wants to achieve. If we look at manufacturing or manual skilled jobs, absolutely line managers should be involved, whether that be all or some line managers, focus groups, or representative experts, because they are the people on the ground, they see, hear, things that reward, and compensation and benefits managers wouldn’t necessarily see.
“But, at the same time, they are also able to disseminate information downwards and get feedback which can be helped in the design of future schemes.”
However, in some sectors, for example, professional service organisations, an individual will generally outline what they want and how they want it to be delivered, so there isn’t as much of a need for line managers to be involved in reward and benefits conversations, adds Patel.
Typically a reward strategy will be led by the reward manager or director in an organisation, who will also work with the finance and leadership teams. Line managers can be an important part of the information jigsaw used to set a strategy, says Samantha Gee, director at Verditer Consulting. “Line managers are on the ground and they understand the people that work in the business and the culture really well,” she explains. “They understand the current state and they probably have a view of what they’ve seen work well elsewhere, but they may not have a view on how reward and benefits could make a difference to the business going forward. And that’s the key, that’s where the leadership team would say ‘how can we make our pay and benefits influence the success of our business in the future?’”
Constructing a reward strategy involves a certain degree of internal research, and this is where line managers can add value. Andrew Drake, consulting and proposition director at JLT Employee Benefits, says: “What’s really important is employee feedback, generally [employers] will say that employee feedback is a key ingredient in how [they] shape [their] benefits package. Most people do surveys or focus groups, one of the things they lack is line manager feedback, ‘what are your people telling you on a daily basis?’. Some [employees] are sceptical around surveys and focus groups, [they] might not be entirely honest. If [they] trust [their] line manager [they] might be more open to a very honest discussion with them, which they could feed back centrally, all very anonymised, but it could input to help shape a reward programme.”
Line managers may not be accountable or have responsibility for a reward strategy, but they are consulted and informed about changes. David Wreford, principal at Mercer, says: “I don’t think line managers have much influence over the design of reward programmes individually. The reward programmes need to meet the needs of the organisation and a good reward person should be listening to the talent needs and what drives performance, should have a good understanding of how these things operate within the business, and will, therefore, be listening to managers.”
Having eyes and ears on the frontline of the workforce means that line managers can be critically important in helping to shape any change within an organisation. Michael Rose, director at Rewards Consulting, says: “[Employers] will tend to get a better quality change because [they’ll] get better quality information if [they] engage with line managers, get them to feel part of the solution, get them to understand in advance of anyone else what’s going on, and take their views. And when it comes to communicating change later on in the process, hopefully they’re already onside because they’ve been part of it.”
Pay and bonus
In its Global findings report for the 2016 global talent management and rewards study and global workforce study, published in June 2017, Willis Towers Watson found that 40% of employees in the UK think their manager makes fair decisions about how performance is linked to pay.
But what role do line managers play in bonus or pay reviews? They may know an individual and that person’s performance better than other managers in the business, but in many organisations, the reward function is ultimately responsible for setting the strategy. “It’s about training and communication for line managers,” says Wreford. “Because the way in which employees experience the reward messages, partly in what they’re told, but also how they perceive the decisions that are made about their increases or bonus awards, is through the decisions that line managers make. I feel that there’s more that we can do to make it a transparent and honest process.”
A line manager’s ability to be honest and open about what an individual is achieving and how that impacts on their reward, is fundamental to greater transparency in pay decisions. “If employees don’t ‘get it’, they won’t know what to do to get more, and those things are typically what the organisation wants them to do, which is to perform better, to grow and so on,” says Wreford. “So this issue of line manager advocacy is really important.”
The degree of involvement of a line manager in these decisions will vary from employer to employer. In industries such as production or manufacturing, the line manager will absolutely be involved in bonus reviews because they have the relationship with the individual. “In more of the professional services [sector], then the role of line manager [in this process] is very much redundant because a reward team carries out that function quite actively, individuals in that sector know what they’re likely to get based on the businesses goals, objectives, and performance targets,” says Patel. “It’s clearly articulated, and it comes down to how [bonus] expectations are set.”
Health and wellbeing
Line managers can play an important role in supporting employees’ health and wellbeing. They are very often an employee’s first point of contact day-to-day and have an understanding of their wellbeing. Wreford says: “There’s a role for line managers in better promotion and support for the benefits frameworks, and also things like wellbeing. They should be better at recognising issues they could deal with more proactively in terms of peoples’ health, mental wellbeing and financial wellbeing.”
While the line manager perspective is valuable in all areas, strategic reward decisions must align with an organisation’s culture, objectives and the kind of employer it wants to be.