For HR to become a valuable business partner clearly helping top management improve the bottom line, the total rewards function must take the initiative and act productively. Reformatting talent into more mutually valuable combinations will solve many important issues.
Here are the typical problems:
- HR feels left out from “the big table” where key decisions are made by top management.
- Supervisors (including all people-managers) see HR as unhelpful or an obstacle.
- Employees want higher pay but feel blocked by the compensation department.
- Scarce skilled talent and highly productive workers leave for better opportunities.
- Jobs remain substantially the same (although tools change) for decades.
- Public social pressure increases for higher minimum pay rates.
At the same time, organizations want improvements: i.e., to increase productivity, efficiency and profitability, while enhancing employee engagement and improving public support for their brand.
Let’s look at all these various challenges as opportunities for an all-encompassing single solution. Solving multiple negative problems while simultaneously satisfying numerous positive objectives is always an excellent idea.
There is rarely any valid economic excuse to pay a lot more or less than necessary for any combination of work output expectations called "a job." If you want to pay more, why not make the job worth more? Rather than argue over excessive wages, change the economic formula to your advantage by redesigning work into jobs worth greater amounts.
Combining enough valuable output deliverable elements from two low-paying jobs to form one good-paying job can be smart, cost efficient and socially praiseworthy. Simply paying more than the market requires for unskilled labor may win you praise from some, but any unnecessary economic cost passed on to the owners or shareholders will usually earn their displeasure. Instead of even retaining a collection of extremely simple work tasks bundled into a job that pays too little to live on, why not instead upgrade the functions, blending the component parts until they support a living wage?
That process is not very different from the result of many job reclassifications. When you confirm that an incumbent has "growed" her role from A to D, you often conclude it deserves a higher compensation level. In that case, HR passively reacts after "suddenly discovering" that someone has enhanced his/her job into a new value category. Instead, you can take the initiative to deliberately design a richer combination of tasks and responsibilities. Finding a more powerful leverage point or a superior bottom-line context application for the KSAs already available in your talent pool is a great way to add value to the enterprise.
Another approach might be to eliminate minwage “jobs” by making those functions part of orientation, probationary periods and on-the-job training (OJT) for “living wage” jobs rather than stand-alone dead-end positions. Or reserve them for developmentally disabled workers or employees temporarily on limited duty status, maybe.
Reshaping work content can meet many needs. A proper, appropriate and aggressive use of total rewards tools can be much more cost-effective to the employer than arbitrary minimum wage increases. It also should be less expensive and less organizationally traumatic than a re-engineering project conducted by outsiders, too. I know many of you have "re-bundled" or "reconstructed" jobs, even if you called it something else, like “work transformation,” “job design” or “career enrichment.” What did you call it when you tried this? And how did it work?
Or has this process contributed to job elimination, outsourcing and off-shoring? There seem to be more questions than answers, but these questions must be asked before they can be answered.
E. James (Jim) Brennan was Senior Associate of ERI Economic Research Institute, the premier publisher of interactive pay and living-cost surveys. After over 40 years in HR corporate and consulting roles throughout the U.S. and Canada, he’s pretty much been there done that (articles, books, speeches, seminars, radio/TV, advisory posts, in-trial expert witness stuff, etc.), serves on the Advisory Board of the Compensation and Benefits Review and will express his opinion on almost anything.
Creative Commons image "Building Blocks" by Eran Sandler
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