WHY COMMUNICATE? | Communicating the Benefits

One of the prime objectives of the reward system should be to motivate people and so ensure their commitment. Hence the theme of paying for performance and contribution which has run throughout this book. But how can the system motivate if left to its own devices - if people are unsure why the system was developed, suspect that it is unfair, or are unsure about how their pay will be linked to performance, or what their future rewards are going to be as they take on greater responsibility? And how can the organization get any mileage out of its logical, equitable, competitive and even creative reward system, its high level of rewards or its generous employee benefits package if it does not tell its employees all about them?

Payment systems can sometimes demotivate even more effectively than they motivate, even if introduced with the best intentions. This is because they often seem to be unfair. Pay is perceived as being either inequitable or not commensurate with performance. Elliott Jacques called this the felt-fair principle. He suggested on the basis of extensive research that people feel their pay ought to be fair in relation to their personal contribution, to what other people are being paid within the organization, and to what is being paid by other organizations for similar jobs. If management wants to motivate its employees, these expectations must be satisfied. It is worth remembering that the most respected theory of motivation - the expectancy theory - states that it is what people expect to get, if it is worth having, which will motivate them most effectively, rather than what they have already got.

So it is important to motivate people by telling them that what they have got is worth having - if that is the case - and even more important to tell them what they can expect. This starts with the recruitment process and ends with the way in which retirement or indeed severance is handled. If they have been rewarded for doing well, that has to be communicated to them. If they are going to get higher rewards for doing even better in the future, that must also be communicated, but more clearly and attractively.

PAY PLANNING

In any pay system where progression rates vary according to performance there will be anomalies. These can arise when performance suddenly improves or gets worse and staff are either under-or over-paid because it is not possible, using the normal guidelines, to place them on the right curve immediately. In this situation these people would have to be treated individually and their salary increases adjusted to accelerate or decelerate their progression through the range, so bringing them back in line.

It is in these circumstances that managing reward processes requires judgement and a sensitive approach. Inevitably, this book has largely been about systems and procedures. But ultimately we are dealing with people who want and deserve to be treated as individuals, and this applies as equally to those who manage as to those who are being managed. Mechanistic systems of salary administration may make life easier for the personnel department but that is not the object of the exercise. No members of an organization can be really happy, well motivated and committed if they feel they are part of a machine which pays no attention to their individual needs.

Salary planning and administration must adopt the stance of thinking first of what is right for individuals in terms of their aptitudes, abilities, skills, performance and needs. Of course, this approach must always be tempered with the knowledge that the organization also has needs which demand satisfaction. But an integrated approach to reward management can optimize the needs of the organization and those of the individuals, and these should be seen as complementary, not opposed.

Salary planning therefore has to treat people as individuals who are pursuing a career. This means looking at how that career is developing and ensuring that the incentives and rewards for increasing competences and improving contribution and performance go hand in hand with progress within and through the organization.