In the world of total rewards, “alignment” is not only a powerful word but an action too. We often hear organizations trying to be market aligned, whether in how they price select positions or in their overall market positioning. First… before considering your external comparability, have you assessed alignment from the internal perspective?
What I mean is this: How does your business strategy align with your total rewards strategy? Or does it? I see an organization as being built upon four main pillars: purpose, people, process, and product.
Your purpose is the reason the organization exists. It is the “why” and “who” you are as a company. Next are the people who will live out the purpose and bring life to the business objective. Your team will put forth the time and effort to carry out the day-to-day operations. The third pillar is process, which outlines the specific procedural steps and guidelines that employees will execute. The outcome is your product. With all preceding elements in place, then the purpose is realized with a resulting product, service, or solution.
Your total rewards strategy is no different from the above; in fact, it runs in parallel to your business. The purpose is essentially your pay philosophy, built upon guiding principles describing why you pay the way you do. We, the people, are the constituents that are in constant interaction with the strategy. The pay policy (i.e. "process") provides the basis for administrating your rewards program. It will describe the “how” in handling unique pay scenarios or outline the mechanics of your incentive program. Finally, the product is the pay or reward element(s) offered.
When these pillars are designed in unison, then you are ensuring your total rewards strategy is an extension of who you are as a business. You will reward the behaviors that will drive the business forward, your pay administration will articulate the pay structure that is reflective of the stage you are at in your business life cycle and so forth.
As an organization matures, expands, or re-invents itself, the business strategy will (not surprisingly) take on a new direction too. As it does, we would expect to see some or all four of our business pillars take on new meanings. For example, a new product may be added, which in turn could cause a change in the existing process. Any pivot of the strategic direction, will require a simultaneous re-evaluation of the total rewards strategy. Does your pay philosophy, policy and delivery of rewards still maintain the strategic link it once had? If not, you have likely lost your alignment, and will need to re-focus your total rewards design so it continues to run in parallel with the business.
When forced to take a detour, remember to re-evaluate all strategic elements, and don’t forget to share the directions!
Reena Paul (CCP, GRP) is a Senior Consultant with LifeWorks Compensation Consulting Team. She is passionate about all things “total rewards” and has experience in dealing with all stakeholders of an organization and strategizing optimum client-focused solutions. A lover of data and the story it tells, Reena enjoys the exploration of presenting and discussing compensation with a fresh perspective. Connect with Reena on LinkedIn, or contact her directly at [email protected]
Photo by Brian Wangenheim on Unsplash
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