Communication, aided by technology, can help employers get full value from their benefits offering, says Angela Wright
It is going to be a challenging year for reward specialists faced with reduced budgets for pay and benefits at a time of rising inflation. But is there evidence that we can do more with less? What role does communication play? In what way can technology help? There are four key areas to consider.
Firstly, communication. Chartered Institute of Personnel and Development research has shown communication on reward is still a work in progress in the UK. Greater communication is associated with better engagement and business results. Despite the virtually zero cost, a lack of transparency and communication prevails in many UK workplaces.
Secondly, deployment of technology. Technology has a potentially strong role to play in communication, enabling the creation of individual reports to staff about reward programmes, via email, websites, webinars and other electronic media. Also, the administrative processes relating to salary and benefits can be improved, freeing up HR and reward staff to engage in higher-value internal consultancy activities to create real business value.
Thirdly, recognise what employees value and give them choice. There is rising interest in a more employee-centred approach to pay and benefits. Recognise that staff may value different things and that an element of employee involvement can be beneficial to the organisation and the individual. Procedural justice theory relates to the fairness employees perceive of the decisions their managers make. Employees can see even less generous decisions as fair if they appreciate that a fair process has been used. So pay or benefits cuts can be accepted if the rationale for them is accepted.
Flexible benefits extend choice and increase the perception of procedural justice. Motivation theory indicates staff may put a very different value on aspects of reward than their employers do. Value is not the same as cost, and there may be a value in simply offering choice.
Fourthly, use technology sensitively and iron out system glitches quickly.
Communication is central to the success of flex and other reward, but it cannot be assumed staff will be willing to invest time to interface with complex and intricate systems. In my own research, there was a contrast between generally positive employee comments on how well their organisations communicated and some specific problems with technology.
Problems with online systems, including passwords and other security measures, seemed to pose real barriers. Scheme planners might assume people would invest time in seeing the scheme's potential for themselves, but this is not borne out in practice. Online and call-centre systems for dealing with choices and queries were rated poor, and staff strongly preferred face-to-face communication.
There are three main messages from this research. Achieving positive outcomes from flex and potentially other programmes hinges on the quality of communication. Do not assume staff will have the same 'nerdy' patience to cope with glitches as the system's designers do. Also, the element of choice in flex gives staff a greater feeling of control, and this principle could be extended to other aspects of reward.
Overall, increasing and improving reward communication could mean employers really can achieve more with less.
Angela Wright is senior lecturer in human resource management at the University of Westminster
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References
The impact of flexible benefits on employee satisfaction: a field study, Barber, AE, Dunham, RB and Formisano, RA, Personnel Psychology
Perceptions of distributive and procedural justice in employee benefits: flexible versus traditional plans, Cole, N and Flint, D, Journal of Managerial Psychology
Procedural justice challenges in compensation: eliminating the fairness gap, Newman, J and Milkovich, G, Labor Law Journal
When less is more: managing resources with reduced staff, Robertson, S and Dayal, V, Compensation and Benefits Review
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