Getting managers on board with total rewards

Involve managers in program design, treat as unique audience
By Rob Lewis, Susan Hunter and Marie Donnelly
|Canadian HR Reporter|Last Updated: 08/14/2012

Imagine that, last year, you launched a total rewards program. And you thought you did everything right. You hired a top consulting firm to share best practices and do the research to ensure the reward program would be above market.

You introduced several new programs, including a health spending account, a higher registered retirement savings plan (RRSP) match for long-term employees and an incentive program that gave high performers a chance for a bigger annual bonus.

Then you developed a new identity for the rewards program. You kicked it off with a great presentation, followed by video brochures delivered to every employee’s desktop and personalized brochures sent home. You emailed an easy-to-use checklist to managers to minimize their workload and walk them through the process of making bonus decisions.

But, despite all this, the results were disappointing. There was no positive movement in the annual engagement score and in the survey’s write-in comments, employees were complaining rather than recognizing the value of the new savings account.

And managers’ base pay and bonus decisions didn’t differentiate on performance at all — everyone got the same increase and bonus. In focus groups, employees said the compensation program was uncompetitive and their performance didn’t make a difference in what they received.

So, what went wrong? Quite simply, you failed to get managers on board ahead of time. When it comes to rewards, the most important messages are delivered through managers.

Managers are often the overlooked element in a total rewards communication program. Yet, they are the ones with the most power to influence employee opinions. The messages they deliver about pay, performance and career opportunities are critical. So, how do you get managers on board and saying the right things to their teams? Four key steps are involved:

Get managers involved in program design: A basic tenet of change management is people buy in to programs they have a hand in designing. If they help create it, they’ll support it. While it may not always be practical to assemble a manager task force to help design reward programs, there’s nothing to prevent you from seeking input early on in the design phase and testing ideas.

Treat managers as a unique audience: Managers should learn about the total rewards program before employees so they’re not in the awkward position of dealing with questions they can’t answer. More importantly, managers will comment on a new program when their employees ask — the more enthusiastic the managers are, the more positive the messages they’ll convey.

Start with a special kickoff of the program just for managers. Consider an in-person event that allows you to highlight all the advantages. By doing this, managers will be equipped to communicate the program in a positive way.

Prepare managers to act and communicate: With some reward programs, managers play a huge role in delivering the rewards. This is especially true with compensation, performance management and career development programs. If you want managers to do a good job, make the programs easy for them to use and ensure they have a detailed understanding and know how to use them most effectively. Be sure not to skimp on manager training for programs that affect employees’ pay and career.

Consider the example of a large pharmaceutical company. When it introduced a new job-grading structure and pay ranges, it spent time teaching managers exactly how point-factor job evaluation is done, how salary surveys are used to create pay ranges and what principles should be used to ensure pay is equitable, competitive and performance-based.

At first, there was hesitation about bringing managers in for one full day of training. But the feedback from managers was extraordinary. Some said the training was the best thing HR had ever done for them, many said they had never really understood the program. With better knowledge, they felt much more confident about making good decisions and standing behind their decisions in employee conversations.

Training on how to use pay systems is just the beginning. Managers need communication tools to help them respond effectively to employee questions and concerns. Communication tools need to be developed with the manager in mind and with a clear focus on:

• positioning the total rewards design or redesign

• the reasons why the design or redesign was necessary

• the key benefits of the change

• what the change means to an employee.

Managers need support on two key things when it comes to delivering critical messages to direct reports — what to say and how to say it. Their top concerns will be employees who are skeptical or challenge the reason for the change. A communication tool kit will help managers deal with these conversations, which can be challenging and difficult. In short, managers need the language to communicate effectively so they can reinforce and emphasize the positive messages of the total rewards strategy.

Provide managers an ongoing resource: Give managers a way to provide continuing input on what’s working and what could be improved. They also need a place to turn when they have questions or need support. Treat them like good customers and they’re sure to become powerful spokespeople.

To really get the most from a total rewards program, don’t just make it an HR initiative. Give managers a chance to get involved as early as possible — and keep them involved all through the process. The more they feel like they own the program, the more they’ll do to make sure it’s a success.

Rob Lewis, partner, Susan Hunter, associate partner, and Marie Donnelly, associate partner, work in Aon Hewitt’s talent, rewards and communication practices in Toronto. For more information, visit www.aonhewitt.com.

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