Benefits and Compensation

Engagement and Enablement—Keys to Comp Effectiveness

Yesterday’s Advisor featured consultant Tom McMullen’s take on the new total rewards; today, he lays out the drivers that get your employees to engagement.

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

    Compensation.BLR.com, now thoroughly revved with easier navigation and more complete compensation information, will tell you what’s being paid right in your state–or even metropolitan area–for hundreds of jobs. Try it at no cost and get a complimentary special report. Read more.


    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 is 1.5 times or less than 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.

    Attracting and retaining A players—Important, to be sure, but not the only challenge on your plate. “Maintain internal equity and external competitiveness and control turnover, but still meet management’s demands for lowered costs.” Heard that one before?
    Many of the professionals we serve find helpful answers to all their compensation questions at Compensation.BLR.com®, BLR’s comprehensive compensation website.

    And there’s great news! The site has just been revamped in two important ways. First, compliance focus information has been updated to include the latest on COBRA, Lilly Ledbetter, and the FMLA. Second, user features are enhanced to make the site even quicker to respond to your particular needs, such as:

    • Topics Navigator—Lets you drill down by topical areas to get to the right data fast.
    • Customizable Home Page—Can be configured to display whatever content you want to see most often.
    • Menu Navigation—Displays all the main content areas and tools that you need in a simple, easy format.
    • Quick Links—Enables you to quickly navigate to all the new and updated content areas.

    The services provided by this unique tool include:

    • Localized Salary Finder. Based on reliable research among thousands of employers, here are pay scales (including 25th, 50th, 75th, and 90th percentiles) for hundreds of commonly held jobs, from line worker to president of the company. The data are customized for your state and metro area, your industry, and your company size, so you can base your salaries on what’s offered in your specific market, not nationally.

    Try BLR’s all-in-one compensation website, Compensation.BLR.com®, and get a complimentary special report, Top 100 FLSA Overtime Q&As, no matter what you decide. Find out more.


    • State and Federal Wage-Hour and Other Legal Advice. Plain-English explanations of wage-hour and other compensation- and benefits-related laws at both federal and state levels. “State” means the laws of your state, because the site is customized to your use. (Other states can be added at a modest extra charge.)
    • Job Descriptions. The website provides them by the hundreds, already written, legally reviewed, and compliant with the Americans with Disabilities Act (ADA) mandate that essential job functions be separated from those less critical. All descriptions carry employment grade levels to current norms—another huge time-saver.
    • Merit Increase, Salary, and Benefits Surveys. The service includes the results of three surveys a year. Results for exempt and nonexempt employees are reported separately.
    • Daily Updates. Comp and benefits news updated daily (as is the whole site).
    • Ask the Experts” Service. E-mail a question to our editors and get a personalized response within 3 business days.

    If we sound as if we’re excited about the program, it’s because we are. For about $3 a working day, the help it offers to those with compensation responsibilities is enormous.
    This one’s definitely worth a look, which you can get by clicking the link below.
    Click here to get more information or start a no-cost trial and get a complimentary special report!