How can employers use total reward to align staff with business goals?

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Need to know:

Providing employees with shares, or aligning financial reward with business performance, can give staff a vested interested in organisational goals.
Aligning recognition with the employer's values and objectives can influence employee engagement and behaviours, but should be carefully considered so as to avoid damaging objectives.
Using effective communications and a culture of transparency, organisations can foster an environment in which they work together with their employees towards common goals.

Employee engagement is at the forefront of most benefits strategies, particularly as employers increasingly understand the correlation with higher profits.

Megan Barbier, vice president of HR at Wrike, says: “People that feel connected to what they’re doing are more productive and feel happier. If your workforce isn’t optimised and bringing in their best for your business objectives, you’re missing an opportunity as an employer.”

Beyond just boosting satisfaction, how can employers engage staff directly with business goals?

Sharing the profits

One of the most obvious methods of getting employees to have a vested interest in organisational performance, and in turn influencing their behaviour positively, is by using share schemes.

Craig Unsworth, chief executive officer of Upgrade Pack, which awards share options to all of its employees, says: “I would buy from [certain retailers] because I know I’m going to get good service; [employees are] engaged and they care, and I wholeheartedly believe it’s because they are directly invested in the business.”

There are various choices available to employers: a sharesave scheme allows all employees to save out of payroll and buy options in the organisation; a share incentive plan (Sip) involves shares or share discounts being gifted to staff; and a discretionary executive share plan is aimed at retaining top-level talent.

All routes have tax benefits and foster an active investment in the organisation; Sips, in particular, allow for a link between individual performance and business success.

However, simply implementing a scheme might not have the desired effect, warns Ian Bird, business development director at Secondsight: “You have to run some form of education alongside share plan arrangements. It is all well and good giving somebody a leaflet, but [there is] a real lack of financial awareness among employees about these products.”

When used correctly, giving employees shares can set a fundamental precedent. “People remember that when we are spending money, everyone is a shareholder and it’s their money; or when we are making a decision, they speak up because it’s also [their organisation],” Unsworth explains. “It’s the backbone of how people work with each other. It has definitely created a team and a [sense of] belonging.”

Financial incentives

To ensure employees associate their own success with that of the organisation, employers might simply consider aligning financial rewards with business performance.

Some organisations, for example, provide bonuses at the same percentage of salary for all employees, basing that percentage on business performance. The amounts then vary from one individual to the next depending on salary, allowing for a combination of business and individual success to be felt by staff.

However, it is also important to look past purely monetary motivations, notes Lord Mark Price, founder of Engaging Works: “[Employers] can give people financial rewards, but actually just being thanked for doing something well, feeling you’ve owned the outcome, is more powerful in terms of people’s day-to-day happiness and engagement.”

Recognition strategies

Ensuring that recognition is strategically aligned with organisational values can help educate staff about business goals, while incentives can also be used to reinforce positive behaviours.

Brad Winsor, vice president of analytics at SplashBI, explains: “[It should not be] just managers saying ‘nice job today’, but peers recognising each other specifically for exemplifying a core value. Being recognised is important, but actually recognising is more important to engage employees.”

Carefully considering the alignment of recognition with business goals will also help ensure that the right kind of behaviour is being rewarded, avoiding potentially negative impacts on business performance, such as boosting sales at the expense of customer experience, says Price: “It needs to be done thoughtfully, mindful of the consequences of the approach and that it builds a workforce in harmony and not competing against each other, which ultimately creates less empowerment, involvement and happiness.”

Effective communications

Whatever benefits are used to link reward with business goals, an initiative is only as strong as the communications around it.

“[They have] got to be careful about sensitive data and information, but employers are getting better at talking to people about what the corporate goals are, what they’re trying to achieve, and the developments they are making,” notes Bird.

Technology has a considerable role to play, says Cyrus Gilbert-Rolfe, managing director, Europe, Middle East and Asia (EMEA), at SocialChorus: “It’s not white-collar versus blue-collar, it’s wired [versus] wireless; people that work in a distribution centre or factory, or drive a van, they’ve never heard the chief executive officer speak. It’s damaging for attrition, for productivity.”

Employers should communicate business goals to staff using a range of mediums, making particular use of video and messages direct from senior leaders, while ensuring that the important, need-to-know information is provided alongside lighter, nice-to-know messages.

Data and targeting

Communications about business goals can become even more effective when targeted to specific demographics.

Gilbert-Rolfe explains: “What [communications platforms] can do now is use artificial intelligence, profiling and targeting, meaning that the content [employees] receive is relevant, useful and interesting. Compared to the one-size-fits-all broadcast communications [used] since the advent of email, it feels like it’s about [the employee], because it is.”

In addition, advancements in technology can help employers understand which goals and values employees are most invested in, and which ones need to be better promoted or more strongly aligned with reward.

This data can also be derived from various places, and used to address dissatisfaction in the workforce, making employees more likely to see eye-to-eye with their organisation, says Winsor: “A cool thing about recognition is that it generates a lot of data; what people are being recognised for and why is actually a really valuable source of information.

“Predictive analytics can also tell [employers] what the exit drivers are. Engaged employees for some reason can show signs of an exit driver; instead of just giving everyone a coffee mug, [employers] can specifically address the exit drivers.”

Transparency

Indeed’s research, The meaning of work, published in June 2019, found that 56% of employees support full pay transparency, a trend that is already being picked up by some employers, such as social media management organisation Buffer.

Full transparency is hard to achieve, and many businesses are not equipped to launch into it directly; however, as Upgrade Pack found, building the right culture can start with a simple step towards being open with staff.

Unsworth explains: “[The share scheme] is designed for people who are here on the journey; it could have been quite easy for us to gloss over that, but we had the awkward conversations at the beginning that said it might not be a great benefit for [others]. We have been very focused on being honest with people.”

Duncan Brown, head of consulting at the Institute for Employment Studies (IES), adds: “The trouble is that most employers try and dictate it on their terms, they don’t genuinely involve employees in decision-making. They don’t talk about difficult issues, like gender pay gaps or executive pay escalation, even though their employees are reading that stuff in the paper every day.”

Autonomy and ownership

For employees to understand their own impact, and associate their personal successes with those of their employer, they need to have ownership of their own role.

If employers constantly tell people what to do, they will not get the best results from employees, says Price. “They’ll feel they could have added value which is not being recognised and as a consequence they can’t develop. There’s a whole string of things that come off the back of people feeling empowered, feeling they have responsibility and can therefore be recognised either financially or otherwise for the contribution they’re making.”

This involves effective management, coaching and development, and a well-communicated framework within which employees can take control of their own actions. In addition, simple mechanisms such as flexible working allow employees to feel they are shaping their own contributions, and that the employer is working with, rather than against, them.

Engaging goals

Whether due to enforced transparency or simply the ease of accessing information in the modern age, employees are able to make judgements about their organisation’s performance and values without the employer’s help.

Therefore, part of the battle to engage staff is to have, in the first place, business goals they will see as important or aligned with their own values.

This might mean focusing on sustainability and societal impact, alongside more traditional goals around profits. Incorporating values-based initiatives into a reward system can create a sense that employer and employees have common aspirations, rather than striking an uneasy balance between pay and profit margins.

Barbier says: “Wanting to belong and do meaningful work is universal; we might have lots of cultural and geographical differences, but there are elements of being human that don’t change.”

Employers should also appreciate the holistic nature of reward, using benefits to demonstrate a commitment to the employee experience, which in itself has an impact on the bottom line.

“We’ve become heavily cost-driven in [our] benefits agenda, and that's how we got the low productivity problems that the UK suffers from,” explains Brown. “So, [employers should] avoid a narrow focus on business, [namely] cost priorities, and look at it more as an investment in people to engage them in performance.”

Louise Allen: Aligning employees with business goals is a win-win situation