An insightful Watson Wyatt report offered a simple graphical representation of the rewards ‘sweet spot’, which includes not only cost to the company and alignment with company strategy but also perceived value to the employee.* This report discussed how different types of rewards are interesting to different worker demographics. To give a rough example, workers in their twenties may place the most value on mentoring and career opportunities; workers in their thirties may be more interested in work life balance; workers in their forties may care about salary and/or span of control; and older workers may have more interest in comprehensive benefits packages.
Within these demographic groupings there may also be special interests: for example, women in their late forties or fifties may be available for and interested in additional responsibility once their children are grown.
I don’t want to imply that all workers will fit neatly into their assigned demographic group when it comes to rewards, nor does this mean that just because someone wants to work at home once a week they don’t care how much they earn. Nonetheless, it is possible to analyze trends and get better at offering the right mix of rewards.
An interesting talent management use case described how the AlliedBarton Security Services' human capital department used various performance measurements to discover that managers were leaving just as they started to get productive. This case study offers an excellent example of how a company analyzed a specific employee cross-section and discovered something worth knowing. The same principal could be applied to different demographic groups to assess whether there is an attraction or retention problem within a particular group, which might point to an uncompetitive rewards package.
Conversely, rewards packages can be tailored to target and attract particular demographic groups once you better understand their priorities.
A thoughtful gift should consider the taste of the receiver and the same is true of rewards. And the bottom line benefit of offering creative rewards is that it can help companies achieve their workforce planning objectives without spending more. For example, in another case study, PepsiCo invited employees to identify one thing that would help them each achieve better work/life balance. Once agreed upon, managers shared responsibility for making sure the employee could put their ideas into action and that work performance didn’t suffer. Since many of the ideas involved different work hours or less physical time at the office, employees were motivated to ‘work smarter’ in order to have a better work/life balance.
The takeaway here is that smart talent management strategies don’t focus exclusively on the twin holy grails of salary costs down and rewarding ‘top performers’, which seem to be the prevalent themes. Instead the focus should be on the broader view of delivering more compelling and cost-effective rewards packages to attract, retain and motivate different employee groups.
*“A Successful Total Rewards Strategy: Delivering a Compelling Employment Deal at the Right Cost”, Jamie Hale and John Coskey.