LINE MANAGERS
Role of line managers in reward management
Research commissioned by the Chartered Institute of Personnel and Development has found that many reward policies are designed without taking account of the line manager’s important role.
One of the fundamental problems uncovered by the study is that the involvement of line managers in the formulation of strategy and their key role in communicating that strategy is “often overlooked”.
The CIPD has built a solid body of research demonstrating a strong relationship between employees’ satisfaction/commitment and their rewards, and that front-line managers are key in making this link.
All too many HR professionals, however, do not rate the reward decision-making or communication skills of their line managers.
With these issues in mind, the CIPD asked John Purcell, academic adviser at ACAS, and Sue Hutchinson, senior lecturer in HR management, University of the West of England, to investigate more closely whether reward and performance management policies take account of the fact that they are delivered, in the main, by line managers and how line managers are selected and trained to undertake their people management responsibilities. In addition, the CIPD research examined what line managers do to reward employees.
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First of three reports
This report, the first of three examining aspects of line managers’ roles, is based on research into six organisations. It highlights that good HR practices and sound management practice need to go hand-in-hand if an organisation is to fully motivate its employees.
The report focuses on five main areas:
the meaning of reward
determinants of reward - the importance of context
line managers’ involvement in reward
performance management systems
the role of the HR function.
What can a line manager reward?
Many studies looking at the role of line managers and reward have concentrated on the discretionary element of a line manager’s role in making decisions over the allocation of performance-related pay awards.
In contrast, this research undertaken by Purcell and Hutchinson takes a broader definition recognising that as well as those rewards built into the pay system, line managers have many other ways of rewarding staff which are down to their discretion such as access to training, time to work at home and decisions on job allocation to name a few.
Importance of context
Another important influence the report highlights is the context in which policy takes place. It highlights three major influences on reward practice which also have implications for line manager behaviour:
ownership
types of employee
different groups within the same organisation.
Public sector organisations, for example, are likely to have more cost constraints than City investment houses, while permanent staff will have different needs to those on temporary contracts. Within organisations too, there may be very different groups of employees that may be motivated in very different ways. Each will have different implications for pay design and line manager behaviour.
Line managers’ involvement in reward
The report also examines how line managers are involved in financial and non-financial reward management. In particular, it notes some of the difficulties and concerns they experience.
When it comes to delivering financial rewards, the study highlights a range of problems faced by line managers, including:
finding it hard to differentiate performance and allocate performance-related awards
constraints arising from forced distributions built into such schemes
conducting performance appraisals
frustrations of line managers when their decisions are referred “upstairs”
dangers of non-uniform use of special bonuses and awards and limitations caused by rules and restrictions associated with them.
Non-financial rewards were also much in evidence allowing line managers to make a symbolic gesture to employees with the potential to be powerful motivators. On the other side of the coin though, because of their discretionary nature they can be a source of frustration and can be divisive.
“One person’s recognition implies elements of non-recognition for others” and the report adds that some of the pitfalls can be avoided when these types of award are given to teams.
Performance management
Also recognised was the importance of performance management systems in providing the means by which performance-related pay and training and development needs can be identified. They also provide a way of achieving greater ownership and commitment from the line, and can strengthen relationships between the manager and their staff.
More training required
One solution proposed by the study is for more training for line managers to overcome problems of poor judgment in differentiating performance levels or difficulties associated with having that “difficult conversation” in performance appraisals.
In addition, says the report, increasing use of online systems can help with the administration aspects of performance management.
Line managers need support
The report concludes that while the behaviour and management style of the line manager is important, good training and well-designed HR practices are also essential to motivate and reward employees.
In addition it notes:
There needs to be a climate fostered by senior management that encourages rewarding people management responsibilities.
Line managers need tools available to them to reward good performance even if they are small or non-financial in nature as their immediacy means they have the potential to be highly valued by staff. Care must be taken, however, as such rewards implemented unfairly can cause resentment.
360-degree appraisal and employee attitude surveys examining line manager behaviour can act as a safety net in monitoring their performance.
Many line managers do not understand the need for, or choose to ignore, cost controls necessary in merit pay systems. Better training is needed to combat this.
There should be more line manager involvement in the design and communication of reward systems.
Increasing decentralisation the HR function with outsourcing and call centres has caused tensions and a cultural shift is necessary for this new situation to work.
There is a danger of too much decentralisation to the line and more online systems with the risk of the “human” being removed from “human resource management”.
A final word
Illustrating the importance of line manager behaviour and the supporting HR infrastructure the report adds: “Poorly designed or inadequate HR policies can be ‘rescued’ by good management behaviour in much the same way as ‘good’ HR practices can be negated by poor front-line manager behaviour or weak leadership.”
Want to know more?
Title: Change agenda: Rewarding work - The vital role of line managers, February 2007, by John Purcell and Sue Hutchinson, Chartered Institute of Personnel and Development.
Availability: To download the 26-page report, free of charge, in PDF format visit the “Pay and reward” section of the Chartered Institute’s web site at www.cipd.co.uk and choose the heading “General” on the left of the page. Or you can go straight to www.cipd.co.uk/subjects/pay/general/_rwrdngwrk.htm?IsSrchRes=1
The Chartered Institute of Personnel and Development (CIPD) is the professional body for those involved in the management and development of people and has over 127,000 individual members. To find out more visit www.cipd.co.uk