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Is your reward policy enabling or undermining your career strategy?

30
September
2021

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Alignment between career strategy and related HR processes is essential to successfully embedding a strategic approach to careers. Organisations often consider career development alongside talent management, L&D and inclusion, but miss the link with reward policy.  In this roundtable we explored how an organisation’s approach to reward might need to flex to achieve desired career development outcomes. And how to avoid a situation where career and reward are pulling in different directions.

Dr. Wendy Hirsh was our provocateur. She is interested in approaching career development and talent management from both organisational and individual perspectives; linking employee development more strongly with changing business and skill needs; and helping managers and employees to tackle employment challenges more clearly and confidently.

Insight

David North shared a common perspective from employee insight studies. Mid-level technical specialists often express their frustration – having proactively taken on additional responsibilities, broadened their skill base and increased their contributions – that their efforts are not recognised or fairly rewarded.

Inconsistent messaging can leave people feeling discouraged and confused about how best to develop their careers.

David stressed the importance of understanding how this misalignment between expectation and outcome occurs. What can we do to close the gap?

Participants shared steps they’re taking to ensure reward policy supports employee engagement and career development:

  • Improving the transparency and communication of the total reward package to employees, highlighting development and welfare benefits
  • Extending the top level of salary ranges so it is possible to reward material development in role
  • Providing financial recognition for high-value lateral moves
  • Providing continued support for employee development and agency so it’s possible to progress from entry level to more senior roles
  • Ensuring reward packages are benchmarked with the industry sectors emerging as new competitors for talent
  • Addressing the habit of filling key vacancies with expensive external hires, which causes internal divisions
  • Focussing more attention on the link between careers and reward and opening up a two-way dialogue

Innovation

Wendy started by saying it’s a good time to focus on this topic because careers and reward are twin concerns for people, organisations, and the economies we operate in right now. While organisations and people differ in their situations, preferences and choices, every business needs to connect their career and reward strategies with the real Covid-impacted world people are living in.

Wendy set out some of the different habits of thought that influence career and reward professionals and how these can lead to conflicting strategies. For example, while reward people tend to focus on jobs, and being able to fill current positions and control the pay bill, careers practitioners focus more on people, movement between jobs, and development and contribution over time.

Careers and reward people are different tribes

We were introduced to four typical tensions in which careers and reward pull apart rather than together. In each of these we were challenged with some questions:

Tension 1. Career rhetoric equating flexibility with increasing internal movement – especially lateral career moves into jobs with the same pay

  • What is the business purpose of lateral moves?
  • If for developing skills, how will these skills then be deployed?
  • What is the gain for employees?

Tension 2. Becoming a manager is often the only way of getting more pay

  • What should senior sole contributor roles look like and how will they add value?
  • How should they be paid so people don’t move into management roles for which they’re unsuited?
  • Can we accommodate different mixes of managerial and professional contribution with appropriate pay?

Tension 3. Recruiting in over the heads of good staff at inflated cost

  • What make/buy mix do we want in different groups of jobs?
  • Do our selection processes bias us against people we already know?
  • Do our career development processes need to emphasise experience-building to give internal talent credibility to compete?

Tension 4. Loss of pay progression and skill development within the same job or grade

  • Do short pay scales enable us to recognise and reward job mastery?
  • Should we use broader grade bands to reflect a range of skill and value in the same kind of job?
  • Are we willing to train and support managers to use broader pay bands effectively?

Wendy invited us to consider whether our career and reward approaches are evidence-based and fit to meet these needs:

Structural – well-designed jobs that can be filled from labour supply

Capability – current and upcoming skills, knowledge and experience

Cultural – supporting the values and behaviour the organisation wants

Employee – offering what (enough) good people want and need from work, career opportunities, work environment AND reward

In conclusion, Wendy encouraged us to think more dynamically about careers and reward. Careers can be about promotion or moving from one job to another, but also about upskilling or multi-skilling in more broadly defined job roles, often including project-working with other teams. We should recognise and pay for such increased business contribution rather than thinking rigidly about what a particular job is worth.

Impact

Reward and careers should be thought of as one big bucket

There was broad consensus that careers and reward need to work better together to develop a more holistic career offer which emphasises the total reward package. A career offer that is tailored to attract, motivate and retain people in your sector, based on a deep understanding of their needs.

Our best managers are good at framing the full story of ALL the ways we recognise and grow an employee’s value

Participants shared practical actions for better connecting careers and reward:

  • Present a compelling career story, owned by both careers and reward
  • Explain the business rationale behind our career strategy, for example the role and benefits of lateral movement and experience broadening
  • Consider broad salary bands to provide flexibility to reward valuable skills which are developed and applied in role
  • Engage and develop managers, to act as agents of the organisation in making and explaining career and reward decisions
  • Ensure internals with similar skills, experience, and impact to externals are properly compensated
  • Create opportunities for more conversations between career and reward professionals

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