REWARD MANAGEMENT
New research by Employee Benefits and Watson Wyatt: part 2
UK businesses are confident that their reward strategies add real value when it comes to recruiting, retaining and motivating staff, but they seldom measure the effectiveness of these strategies in a systematic way, according to a new survey carried out by Employee Benefits magazine in association with Watson Wyatt, the human resource consultancy.
Few companies measure the impact of reward practices . . .
Among the 500 organisations surveyed, just 15% agree "to a great extent" that the effectiveness of their overall reward strategy is measured regularly, although 35% say this is true "to some extent". Despite this, 69% of participants claim their reward strategy is an effective recruitment tool, a similar proportion say it delivers on retention and 56% rate its effectiveness in helping staff motivation and productivity.
As Employee Benefits observes: "Our respondents' assessment of the effectiveness of reward and benefits strategy may be accurate. However, their views would be more persuasive if they were always based on proper measurement."
. . . and few involve their staff in the design process
Over recent years, compensation and benefits professionals have become accustomed to hearing that the successful introduction of new reward practices hinges on the involvement of their workforces. But evidence of widespread involvement is thin on the ground: only a quarter of employers in the survey involve their staff in the design and modification of reward packages.
Benefits improve retention
But how valuable are benefits in terms of attracting valued staff and generating loyalty thereafter? More than half of respondents say benefits help to promote retention. A similar proportion believe benefits aid recruitment. But the money spent on benefits appears to have little bearing on improving staff performance. Nor is it helping to boost motivation.
The research suggests that while the traditional benefits package is slowly changing, most packages are still built around the company car, pension scheme, private medical insurance and life assurance.
"It would be going too far to suggest that organisations are turning their back on traditional benefits." — Employee Benefits:
just one in three plan to adopt a total compensation approach to reward
there is little sign of the long-predicted move away from benefits towards a cash-only culture — only one in ten plan to introduce clean cash
almost twice as many organisations aim to forge a link between pay and performance as aim to tie benefits to performance (61% compared with 33%).
Survey details
Title: "Strategic reward", Employee Benefits, March 2000.
Survey sample: the 15-page survey is based on information supplied by 500 organisations, with a fifth of respondents representing organisations with fewer than 100 employees and 9% have more than 10,000.
Business sectors: replies were received from a wide range of business sectors — manufacturing, services (excluding public sector) and finance were well represented, each accounting for around 15% of respondents.
Methodology: survey questionnaires mailed to 6,000 "employee benefits decision-makers".
Availability: call Employee Benefits in London, tel: 020 7970 4000 or email