The document discusses the evolution of reward systems, emphasizing a shift from traditional compensation to total rewards that encompass diverse and flexible benefits. It highlights the necessity for innovation in reward practices while addressing barriers such as risk aversion and complexity. Additionally, it suggests future opportunities for improvement through technology, data analytics, and personalized rewards, while encouraging organizations to embrace experimentation in human resource management.

1. Positioning Reward
for the Future
Jon Ingham
Brought to you by:

2. Agenda
• Changes to date
• Current needs for further innovation
• New opportunities for the future
• Daring to be different!

3. Changes to date
• Broadening out from compensation into total rewards,
especially with extended, innovated and flexible benefits
• Implementation of ‘the new pay’ with increased use and
weight of variable reward
• More global perspective within an integrated approach
to talent management, supported by better technology
and analytics

4. Total rewards
Source: World at Work

5. The new pay
• Team based pay
• Skills based pay
• Competency based pay
• Variable pay
• Non-financial recognition
• Flexible benefits
• Market based pay

6. Reasons for restrained level
of innovation
• Complexity in meeting reward objectives
• Need to bring existing employees along with changes
• General expectations in the job market
• Risk of getting it wrong
• General risk aversion

7. The new new pay?
• In many cases New Pay systems
consume or destroy more value
than they create
• New Pay systems often do not
succeed because there are
unavoidable barriers to strategic
alignment
• Difficult to get right and easy to
get wrong, it is time for a new,
New Pay

8. Changes to date - Discussion
• What innovation have you implemented in your reward
practice?
• Where do you see major opportunities for further
transformation?
• Do you think Reward functions have been sufficiently
innovative?, and if not, what can be done to increase
openness to innovation in the future?

9. Current needs for further innovation
• Government policies
• Growing concerns
• New demands
• HR changes

12. Research, including neuroscience and
behavioural economics
• Reward reduces performance particularly where
creativity is required
• Useful role for prosocial rewards
• Importance of growth mindset
• Self determination theory: autonomy, relatedness,
mastery, purpose

14. HR changes
Recruitment
Learning
CommunicationPerformance
Reward

15. Abolishing performance
reviews / ratings
Source: NeuroLeadership Institute

16. Current needs - Discussion
• How are these forces affecting your companies?
• What actions are you taking in response?
• If you have or are planning to abolish performance
reviews / ratings what are you using to inform reward?

17. New opportunities for the future
• Optimising current approaches
• Pay transparency and differentials
• Team based reward
• Broader use of technology
• Increased use of data
• Greater use of analytics

18. Optimising current approaches
• Personalising reward
• Communicating approach and value of reward
• Enabling managers to make pay decisions more flexibly
• Informing vs just supporting financial budgets

19. Pay transparency and differentials
• Data is already available
(Glassdoor ‘Know Your
Worth’, Linkedin salary
tool etc)
• Enabler for pay equality
but issue for pay
differentials

20. Team based reward
• Need for equitable vs just equal reward
• Avoiding social loafing
– Paying teams for the performance of individual team
members
– Paying individuals for their contribution to the team

21. Broader use of technology
• Social recognition
• Virtual currencies
• Gamification

22. Increased use of data
• Crowdsourcing inputs on
performance
• Using data provided by
technology including
internet of things /
wearables (quantified self /
quantified organisation)
etc

23. Better use of analytics
• Generating insight to
inform decision making
• Running simulations

24. New opportunities - Discussion
• Which of these or other changes offer the greatest
opportunity for improvement?
• What steps need taking to introduce these innovations?
• Is your technology helping progress or holding you
back?

25. Daring to be different!
Business
objectives
Compensation
Benefits
Work Life
Recognition
Organisational context
Human
capital
Social
capital
Employee and candidate
expectations

26. Experiment!
Why are companies so much more innovative when it
comes to jiggering with their balance sheet or product
line than human resources?
It is a question that is dumbfounding Dan Ariely, and he told me that
companies were loath to try out anything new on their employees.
“There is no worse place to try to do experiments than human
resources,” he said. “The first thing on their mind when they hear the
word ‘experiment’ is lawsuits.”

27. Thank you
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