REWARD STRATEGY
Mixed picture of rewards is likely to persist into 2012 and beyond, says QCG
The outlook for reward strategies and policies will continue to be mixed as we move into 2012. This is particularly true in the private sector, where headcount reductions, base pay freezes and zero bonus awards are expected, at the same time as differentiated rewards, non-cash initiatives and innovative bonus and long-term incentive schemes. That’s the main message to emerge from QCG’s Rewards in 2012 & Beyond Survey.
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Key survey findings
The highlights of the survey, which were supplemented with the key conclusions from QCG’s Reward Leaders Forum, a group of senior reward professionals, are that:
1. “The overall picture of economic uncertainty masks a real range of business contexts and subsequent actual and planned reward practices, ranging from base pay freezes and zero bonus awards to innovative bonus and long-term incentive schemes,” QCG says. This variation is particularly prevalent in the private sector. Meanwhile, reward practices in public sector organisations are more restricted and are focused on base pay freezes and limited bonus awards. QCG reckons that a top question facing public sector organisations is how to position rewards once the pay freezes have been lifted and the market picks up. Similarly, private sector organisations need to be prepared for future recruitment and retention issues.
2. “A key challenge is how to get the rewards right for top performers and ‘high potentials’, whilst motivating and engaging with the majority of the workforce,” QCG says. But how are organisations responding to this challenge of engaging and motivating all of their employees with a limited reward spend? According to the study, employers are opting for differentiated rewards, non-cash initiatives and total rewards. Additionally, organisations are using LTIPs and deferred bonuses for key employees below the senior management level.
3. HR and in particular managers have a critical role in setting reward expectations, making decisions on rewards and leading reward conversations. QCG says: “This has always been the case, but is particularly important at the moment when not only are more difficult reward conversations taking place, but also when employee engagement and motivation are so crucial.”
A final word
“There is no ‘one answer’ for how organisations are positioning rewards for going forward, reflecting the wide range of business contexts and performance. However, a universal need exists to ensure that employees are engaged and motivated and the challenge is how to achieve that with an often-limited spend. This does, however, present a real opportunity to think and act creatively about rewards, and it is these more innovative reward practices that we think will be a key trend for 2012 and beyond.” – Vicki Badham, Head of Rewards, QCG.
Want to know more?
Title: QCG’s Rewards in 2012 & Beyond Survey, November 2011.
Survey details: The survey is based on responses from 69 organisations, 75% of which were private sector organisations and 25% were in the public sector. These results were supplemented with the conclusions from QCG’s Reward Leaders Forum.
Availability: The full survey results are only available to survey participants, but a summary is available by contacting Vicki Badham at QCG, email: vicki@qcg.co.uk.
QCG is a “medium-sized business effectiveness and HR consultancy focused on helping organisations to improve and sustain long-term performance.” To find out more visit www.qcg.co.uk.