Show Your Creativity and Make the Tough Decisions!

Working in the compensation and rewards business often requires making tough calls: how or who to reward, how to allocate limited resources, doing what's best for your organization, and not necessarily what's best for individual employees. As you know, it's often a thankless job, but someone has to do it...

Today -- especially today -- it's important that compensation and reward professionals make the critical decisions that are necessary to retain and motivate the workforce, and especially your key performers. In addition, you need to do your best to maintain your organization's compensation philosophy and strategy, while faced with today's reduced compensation budgets. 

Here are examples of the key issues and questions that need to be addressed by many rewards professionals:

• With reduced budgets, should we spread the dollars around thinly to most or all of the workforce, or focus on top performers, while reducing rewards for most of the rest of the workforce? (Performance orientation vs. egalitarian rewards).
• How can we hold down fixed costs, while continuing to drive performance through our compensation/rewards programs?
• Are we willing to look at creating or expanding our recognition efforts and programs?
• Can we critically look at how we motivate the workforce in these lean times?
• Are we willing to expand our variable pay (cash incentive) pool, target incentive levels and/or eligibility to reward desired behaviors and outcomes?
• Should we consider changing and/or expanding our long-term incentive offerings (generally in the form of stock/equity) to enhance retention and potentially future earnings potential for eligible staff?
• What types of changes or modifications to our rewards communication can we make to increase understanding and appreciation of our organization's efforts to retain and motivate the workforce? 

It's times like these compensation/rewards professionals can really show their mettle and help their organizations do more with less and make the tough decisions that need to be made.  It's relatively easy to manage rewards in flush times, but can you show your worth in today's environment?

Doug Sayed is founder and principal at Applied HR Strategies, Inc. a compensation consulting firm based in the Seattle Area.  Doug is a Certified Compensation Professional (CCP) with over 20 years of HR and compensation experience.  He earned a Master’s Degree in Human Resource Management from The Ohio State University.  He is an instructor for WorldatWork, and lead author of the upcoming “hands-on” compensation resource the StategicPayTM Series, a series of  "do it yourself" toolkits for developing strategic compensation programs.

Comments

[Paul Hebert]

A good discussion to have at any company today. I would suggest a couple of other resources that are unlimited but left out of your analysis - time and attention. Both of which are pretty unlimited (we can make the argument that time is limited but c'mon.)

Spending time with employees and focusing on the work and contribution they make is something that can go a long way toward offsetting any reductions in the $, and tangible rewards.

Spend time with employees - chat, discuss, conversate!

[working girl]

I'm skeptical of too much focus on 'top performers' because they too are powered by many others. Top performers implies a limit on the number of people who can receive rewards. The problem is that if you only reward, say, 10 people, why should someone hustle to try to be #11? Too much overt drooling over top performers may result in demotivating anyone who doesn't make that rarified cut. Having said that, egalitarian pay is also rubbish. Superior performance should be rewarded accordingly or you'll lose your hook into your star performers. Companies need to find creative ways to recognize ALL superior performance, not just some arbitrarily set percentage of them.