Employee Benefits Live 2015: Employers with overly complicated reward strategies risk disengaging employees and confusing them about the mechanics and value of their reward strategy, according to John Renz, group human resources director at Lloyds of London insurer, Novae Group.
Speaking as part of his presentation, ’Getting buy-in from board level to enhance your reward strategy’, at Employee Benefits Live 2015, Renz said: “I have to say, at the risk of offending reward professionals, there tends to be an intellectual indulgence around a number of mechanisms associated with reward, and actually, the more complex they are, the more difficult they are to explain.”
Renz said that reward strategies need to be as simple and transparent as possible for staff and shareholders to be able to understand, and delivered by line managers who are sufficiently trained to communicate their value to staff.
Renz’s comments were part of an explanation of how he managed an overhaul of his organisation’s pay and benefits package, which featured a complicated reward strategy that formed part of a traditional and paternalistic culture lacking performance-related pay and reward policies.
Novae Group has since implemented a performance-related benefits and reward strategy, which forms part of a performance-driven culture.
Renz said that rigorous analysis and an evidence-based proposal were key in helping him to win board and shareholder buy-in for the new strategy, as was the communication of the value of the strategy to staff at all levels of seniority.
He warns that staff communication of any new strategy should never be underestimated. “We did assume, often, that a lot of what we were doing was blindingly obvious when it wasn’t, and we probably spent too much time considering the impact of the new strategy for executive directors and not for the rest of the organisation.”