Impactful Reward Strategies

Having been a Reward professional for twenty years, I have seen businesses that get it right and others that fail dismally in attracting and retaining what they define as talent. There is ample research, surveys, and literature that a business’s ability to attract, motivate and retain talent, depends on far more than just reward. Factors such as leadership, company reputation, culture, co-worker quality, progressiveness in ESG, and opportunities for growth and career advancement, all make their way into the employee value proposition of businesses. This article does not negate the impact of these elements nor claims that reward is everything but intends to offer more thoughts on how one can make reward as an EVP element as powerful and impactful as possible to achieve desired results.

As businesses, we design reward strategies and programs and implement practices to influence behaviour and individual (and ultimately business) results. Results and behaviour are, however, driven by feelings that stem from what individuals think. We cannot take responsibility for others’ feelings, but we can influence their thinking. So, let’s see how best we can do that. Let’s design our reward programs and practice mindful of how employees think. During my Brain-Based Coaching Certification, I have come to learn more about thinking and how one can get far better results from a coaching perspective if one considers six insights into the brain, as outlined by the NeuroLeadership Institute. I believe if one applies the same principles in one’s reward practices that it will be more impactful.

Let’s consider my learnings from these six insights:  

1.    The brain is a connection machine.

The brain, specifically the limbic system’s primary purpose is to keep us alive. It makes millions of connections every second and classifies the world around us into things that pose a threat (causing away decisions) or things that can help us survive (causing toward decisions). Noting that we are no longer in the stone age, the point is we want our reward practices, what we communicate and how we communicate, to result in employees making toward decisions. We need to focus on the subconscious connections people make based on information that is available to them daily. Still, we need also to remember that past experiences have created their own connections.

2.    Up close, no two brains are alike.

Connections and maps that have formed differ from person to person when it comes to problem-solving, motivation, and goals, although physical functions work the same. Targeted reward programs and interventions have long replaced blanket or one-size-fits-all approaches with specific outcomes. Even in a targeted group, we cannot assume that the same message will be interpreted similarly or have the same effect from one person to the next.

3.    The brain hardwires everything it can.

The brain naturally hardwires (or makes instinctive) behaviour, thoughts, and repeated activities to spend as little energy from the working memory on consciously thinking about them as possible. It is like functioning on autopilot. If, for instance, rewarding mediocre performance over time has become the norm with no differentiation for performance, a pay-for-performance policy will not automatically deter mediocre performance because it is communicated that lower performance will receive lower rewards. Thus, changing the message will not automatically change the beliefs and subsequent behaviour.

4.    Hardwiring drives automatic perception.

The well-known quote by Dr. Chris Murray, “Mark my words. Perception is reality, and how someone sees you is their reality,” is very relevant. We see the world through our maps/ wiring, which continues to build throughout our lifespan. Subconsciously employees will test new information received against existing maps and connections, which would drive their behaviour. This is where we need to rely on leaders and our Human Capital colleagues to know the business. To understand the baggage, beliefs, and history, the hardwiring and mental frames people hold that influence their instinctive behaviour and perceptions.

5.    It is practically impossible to deconstruct wiring.

Hebb’s rule says that when a cell persistently activates another nearby cell, the connection between the two cells becomes stronger. Thus, focussing on a specific link or circuit to change it may, in fact, have the opposite outcome in solidifying and strengthening it.  The implication for reward is to change perceptions of inequity, and exclusivity or failure to honor commitments is practically impossible. The good news, however, is the sixth insight.

6.    Creating new neural pathways and connections is easier than changing existing ones.

If we consistently communicate certain principles and practices, employees experience congruent leadership behaviour and start experiencing the implications and/or rewards first-hand; the new connections will become stronger.

I believe we can apply these insights to our reward practices and programs as follows to make them more powerful:

• Somehow as reward professionals, we think we are alone, but there is an army of Human Capital colleagues and leaders who are sometimes better positioned to help achieve the desired results – as they are closer to employees and the business. Endeavor to obtain leaders’ buy-in before expecting them to drive the implementation of principles and programs. Empower Human Capital teams and leaders to understand remuneration principles in general, understand and represent the company’s remuneration philosophy, and policies. Ensure that especially leaders have all the necessary information they need to make decisions. Provide the analytics and dashboards after the fact to show the impact of their decisions and the link back to the philosophy and policy.  Leaders and other Human Capital professionals influence and can correct perceptions along the way.
• Do pulse surveys or include in existing 360 assessments or performance reviews the assessment of leaders’ ability to translate the business’s remuneration philosophy and policies to the workforce. Keep working with them as your extension. You cannot go wrong with quality leadership.
• Ensure that the performance management process is robust and sound before linking any rewards. Offer training on the softer side of the process, to both managers and employees on goal setting, review, and unconscious biases. Often discontentment with reward systems and processes stems from the performance management process which has hardwired certain beliefs and misconceptions.
• Be transparent but responsible. Leaders often refrain from sharing because they believe the workforce may not be mature enough to engage with the content responsibly. Guesswork and uncertainty create anxiety and leave room for assumptions and misconceptions. Ensure that leaders, Human Capital teams, and employees are equipped to engage responsibly with the content that is shared with them. Make sure terminology such as “equity”, “fairness”, “affordability” and “market” is well understood before using them loosely.
• Try to stay away from exceptions – it often opposes governance, which gives employees security. Beliefs that are formed based on inaccuracies or misconceptions are extremely hard to correct.
• Ensure that you use different modes of communication from visual/ diagrammatic representation to more narrative approaches, as well as analytical tools where employees can model their own scenario to test the implications for themselves. Cater for the various information needs and formats from entry-level roles to administrative roles, professionals to the executive through notice boards, intranet, and multiple devices.
•  Patience is a virtue. It takes time, repetition, and reinforcement to hardwire new connections, and form new beliefs and new thinking. Therefore, consistency in the communication of intentions, processes, progress, and outcomes supported by congruent leadership behaviour is critical. An appreciative culture where the right beliefs and behaviours are acknowledged and in so doing reinforced does not cost money.
• Never underestimate what you communicate without saying anything.