McMullen is Reward Practice Leader for Hay Group in Chicago. He was joined by Dow Scott, Professor of Human Resources in the Quinlan School of Business Administration at Loyola University Chicago and president of Performance Development International, a management consulting firm. Their remarks came at the WorldatWork conference in Philadelphia.
McMullen offers the following “equation” to show how the drivers result in the desired behaviors:
Engagement + Enablement = Effectiveness
These drivers of employee engagement …
- Clear and promising direction
- Confidence in leaders
- Quality and customer focus
- Respect and recognition
- Development opportunities
- Pay and benefits
… will result in these employee behaviors:
- Commitment
- Discretionary effort
These drivers of employee enablement …
- Performance management
- Authority and empowerment
- Resources
- Training
- Collaboration
- Work, structure, and process
… will result in:
- Optimized roles
- Supportive environment
And the overall result will be employee effectiveness shown by:
- Productivity
- Financial performance
- Attraction and retention of talent
- Customer loyalty
- Innovation
- Enhanced corporate reputation
What are your competitors offering workers these days? Check your state’s edition of BLR’s exclusive Employee Compensation® program to find out.
Differentiation in Pay
Pay differentiation is not what it should be, and companies expect to put more emphasis on that in the future, says McMullen.
|
Increases and Incentives ▼ |
% saying this is a current focus | % saying this will be a greater focus in future |
| Salary increases between top and average performers | 21% | 50% |
| Incentive payouts between top and average performers | 30% | 44% |
Sixty-eight percent of respondents said their top performers’ salary increase differential is1.5 times or less that of average performers, while 32% said the differential is 2 times or more.
Interestingly, in most-admired companies, 53% had differentials of 2 times or more. Most-admired companies find a way, says McMullen. He quotes Jack Welch:
“The A’s (the top 20%) should be getting raises that are two-to-three times the size given to the B’s. B’s should get solid increases recognizing their contributions every year. C’s (the bottom 10%) must get nothing.” (Jack Welch, former chairman & CEO, GE)
Impact on Reward Professionals
Finally, says McMullen, everyone involved in compensation planning should consider the following:
- Doing more with less. As the agenda becomes more strategic, reward professionals need to utilize limited resources to accomplish even more.
- Communications. Sustained communication of the entire reward package with reinforcement of key performance messages is very important.
- Coaching line managers. There should be more focus on coaching line managers on how to best communicate and implement rewards.
- Differentiating rewards. In coaching line managers, reward professionals need to ensure top and poor performers’ rewards are appropriately differentiated.
- Nonfinancial rewards. Given its renewed focus, reward professionals must be creative in the nonfinancial reward space and how these are leveraged.
Trying to find the best way to work your rewards strategy, a never-ending battle. From audits and commissions to market pricing and executive perks, compensation and benefits hit you with something new every day. You need a trusted, go-to resource.
For more than 20 years, experienced comp and benefits pros have relied on an extraordinary program from BLR®.
In fact, thousands of managers have put their faith in Employee Compensation in [Your State]®. The [Your State] refers to the fact that a separate edition is published for each of 43 U.S. states, plus the District of Columbia. So if you live in Illinois, Employee Compensation in Illinois is the reference you receive.
Don’t just look at national data when you can have data specifically for your state. It’s all in BLR’s famed Employee Compensation program. Try it on us! Find out more.
Each edition of the Employee Compensation in [Your State] service contains these key elements:
- Recommended Rate Ranges localized for your state and region for hundreds of jobs, based on surveys and official data. You shouldn’t pay the same in Manhattan, Kansas, as you do on Manhattan Island in New York. This program makes sure you don’t.
- A to Z State and Federal Law Comparisons. Comp and benefits are regulated by a tangle of laws. Employee Compensation offers an alphabetically arranged set of practical analyses on how to comply. Look up “ERISA” or “Overtime” or “Workers’ Compensation” and you instantly have a plain-English explanation of how the controlling laws—state and federal—apply to you.
- A Full Job Descriptions Program. Employee Compensation offers a complete tutorial for setting up a job descriptions program. Many ADA-compliant sample job descriptions are provided, ready to copy and use.
- Free newsletter and updates. The Employee Compensation newsletter helps keep you on top of new state and federal compensation and benefits laws. Six updates throughout the year keep your book current with all new compensation laws.
- Complete wage and salary administration guidance. This walks you through the entire compensation process with step-by-step instructions for analyzing and pricing jobs, writing job descriptions, employee compensation policies, and more.
Use the links below to see samples of the program and newsletter, as well as a full table of contents of what’s included.
The program is priced affordably for small companies as well as large, at only a few dollars a day. That’s coffee money for just about every form of information most managers need to run a competitive and efficient comp/benefits program.
Wondering which people think is more important–engagement or enablement?