Contemporising compensation, recruitment and development

New Thinking 20 November 2018 Bruce Keightley

In team-based cultures, individual talent thinks differently about how they’re rewarded and about their personal development. They also expect HR to make sure inbound recruits have the soft skills to suit the team world.

In my first two blogs, I outlined the case for change in HR to enable Business Agility and the first steps to take on that journey. In this blog, I talk about the next steps. First, a recap…

The power and the benefits of Business Agility are enabled through the forming and maintaining of long-lasting teams. These teams are delegated the responsibility and accountability for delivering value and are empowered to determine how their work is done.

The changes and new ways of working in HR to enable Business Agility all focus on this move to a team-based culture. Doing things differently with appraisals and feedback, employee experience and engagement, and expanding skill sets are starting points. Here are some other elements that need changing…

Innovate how you compensate

Bonuses, pay and performance are too intertwined to adequately support and reflect team-based remuneration. Individual performance – rewarded by annual bonuses and pay increases – drastically degrades the value of team work. Honest feedback is less likely when it might affect a pay rise or bonus for a colleague.

It’s not surprising then that organisations are doing away with annual pay increases and bonuses. Instead, bonuses are being rolled up into pay which is adjusted more frequently throughout the year to reflect changes in the market. The intent is that employees feel fairly compensated for the work being done.

Outstanding performance is being recognised in new ways too. Small spot bonuses and instant rewards are given to reinforce great feedback and non-financial rewards are increasingly being used for the same purpose.

Focus on soft skills when recruiting

Organisations need to think differently about recruiting talent. While technical skills are still needed and are easily verifiable, future talent needs a range of softer skills associated with developing and maintaining high-performing teams. These skills – which include team coaching, servant leadership, facilitation, conflict resolution, negotiation and problem solving – are much harder to verify.

Experiential interviewing models such as STAR (situation, task, action, results), CAR (context, actions, results) and CARF (context, actions, results, feelings) can give a multi-faceted view of prospective candidates.

The questions and tests used in experiential interviews provide a better way to assess a candidate’s skills and personality. The goal is to encourage candour and give the candidate opportunities to demonstrate how they would really perform on the job.

Bring learning and development up to speed

Many organisations fail to execute any proper formal learning and development programme, let alone deliver a learning system that feels fit for now. This has serious implications for talent acquisition and retention because the new kind of talent organisations need to attract, plus the existing talent they want to keep, will increasingly place personal development as a priority criteria in their career.

In addition to acquisition and retention, other factors are combining to influence how organisations view learning and development:

  • The promotion and adoption of a growth mindset
  • A focus, both individually and organisationally, on continuous learning
  • Changes to our understanding of how adults learn

The future is self-directed, self-paced learning using a Learning Management System that incorporates aspects of Artificial Intelligence and is configured to look and behave more like Netflix than Wikipedia.

So what? Now what?

Organisations wanting to successfully implement Business Agility will struggle if the supporting HR policies, processes and practices have not been modified and are not in place. Logically, this means that HR needs to lead the change by embracing new ways of working first.

Ultimately, every aspect of an employee’s journey with an organisation will be affected, from recruitment to onboarding, induction, remuneration, appraisal, feedback, career progression, personal development, rewards, bonuses and finally, exiting the organisation. Done successfully, HR becomes an enabler of Business Agility. The alternative is that HR becomes a handbrake, slowing down the change and potentially derailing it entirely.