Agile HR & Total Rewards Strategy
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AGILE Total Rewards
Design your compensation & benefits programs to incorporate and reinforce Agile HR values such as learning & knowledge sharing
Motivate people to perform their best without inflated financial rewards. Focus on creating a culture that inspires purpose and creativity
Move away from ‘one size fits all’ programs; vary base salary & variable pay
Extend into employees’ individual personal, health, wealth & financial security needs
Consider “pay-for-skills” philosophy
Conduct compensation modelling to optimize compensation structure & budgets
The area of total rewards has been one of the most 'traditional' parts of the human resources function. Most companies adopt an 'if it's not broken, don't fix it' approach towards this domain, for fear of touching something almost sacred in an organisation. Thankfully, some companies have blazed the trail in innovating their totals rewards programs. One notable example is Bosch which has successfully reinvented itself by pursuing an agile approach throughout the organisation.
So when one talks about Agile Total Rewards, it takes gumption to even explore what that might look like. Following the form versus function line of thinking in design thinking, what might Agile Total Rewards look like if we ask our employees what they need? And we are referring to more than flexible benefits which do a neat job of providing some options.
Agile total rewards should be designed to reinforce agile values such as learning & knowledge sharing to motivate people to perform their best without having to inflate financial rewards. The focus is on creating a culture that inspires purpose and creativity. More than ever before, progressive organisations have started to move away from 'one size fits all' programs; and taken the step to vary base salary & variable pay.
Organisations should consider extending into employees' individual health, wealth & financial security needs. This may be an important move, particularly during these periods of uncertainty and instability, even as some economies continue to struggle with the pandemic and recurring second and third waves. Employees do need such proactive support from their employers, even middle-class professionals who probably didn't have to think about health and financial matters much before. The situation post COVID-19 may be a very different one and would certainly alter our lifestyles on a long-term basis. The cost impact of being innovative in one's Total Rewards strategy might not be as onerous as one may think but certainly, a commitment, creativity, and rigorous due diligence are necessary.
Image Credit: Organize Agile
Another more 'differentiated' yet pragmatic approach would be to consider "pay-for-skills" philosophy. Instead of the standard annual increment exercise-based purely on employee performance rating and the company's general financial performance, it might be worthwhile paying attention to critical skills that are needed for the organisation to succeed. When organisations start to articulate what are the actual skills, knowledge, and behaviours they value and reward for, employees will start to pay attention and there will be stronger alignment in terms of direction and goals.
It also pays to conduct compensation modelling to optimize compensation structure and budgets. LaserBeam's Compass Talent Management system has nifty features to simulate annual salary increases, enabling bonus and executive compensation planning and modelling. The tool provides managers with the discretion of managing and owning their budgets, with minimal support from HR. Refer to the ‘Digital HR Framework’ to see how HR tech can be fully integrated across the employee life-cycle to enable both digitalisation and innovation. It’s time to take that first step to get agile with your total rewards!
This article is a part of our ‘Going Agile in HR’ series. Stay tuned for our next article.
LEARN MORE ABOUT GOING AGILE IN HR:
Going Agile in HR: Competency Management
Going Agile in HR: Talent Acquisition
Agile HR & Total Rewards Strategy
5 Tips for Designing an Agile Job Framework
Agile HR explained in less than 4 minutes
REFERENCES
Chinnuswamy, Y. (2018). How Bosch helps its employees 'invent for life' | HRM Asia. HRM Asia. Retrieved 13 July 2020, from https://hrmasia.com/how-bosch-helps-employees-invent-for-life/.
Rigby, D., Sutherland, J., & Noble, A. (2018). Agile at Scale. Harvard Business Review. Retrieved 13 July 2020, from https://hbr.org/2018/05/agile-at-scale.
Why Bosch HR head is a 'glocal' agent of change. Hcamag.com. (2018). Retrieved 13 July 2020, from https://www.hcamag.com/au/news/profiles/why-bosch-hr-head-is-a-glocal-agent-of-change/152802.
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