Mykkah Herner, M.A., CCP, PayScale
I recently returned from World at Work’s Total Rewards Conference: Evolve. It’s always helpful to hear what our fellow industry leaders have to say about compensation trends, how they’re handling the challenges of 2014, and what up and coming best/next practices are on the horizon. PayScale’s cohort was able to attend 25 different sessions in the conference this year, after each session comparing notes to determine the session winner: who had the best session with the most content and the most engaging presenters.
Perhaps my favorite takeaway from the conference this year: Think like the big companies think, don’t necessarily do what the big companies do. With that in mind, there were a few key themes that seemed to emerge and permeate the sessions.
- Employer / employee relationship – There has been and continues to be a fundamental shift in how employers relate to their employees. Employers no longer have the luxury of sitting by and waiting for employees to flock to their companies. Instead, they need to do a better job of messaging the employment value proposition, engaging employees and developing appropriate total rewards packages. Employees of the future are interested in doing work that matters for companies that do good things.
- Internal brand – Along those lines, a lot of the bigwigs are focusing their attention on internal branding and messaging. Essentially, they’re taking their external brand and mission and applying it across the organization internally. But, they’re not stopping there! They’re then doing the internal PR piece so they can brag about what excellent companies they are to work for.
- Transactional to strategic – Technological improvements have enabled and now require us, compensation and HR professionals, to move from the transactional to the strategic. Increasingly, comp and HR will be needed to experiment and drive the business strategy forward through our development of new compensation plans that are more innovative than the comp plan of the past.
- Use data to tell the story – With increased access to big data & crowdsourcing, comp and HR professionals have to get comfortable using analytics and metrics to tell the (human) story. The science of compensation matters, but the art is in the story, and the story is what ultimately leads to change.
- Holistic approach – Compensation isn’t done for the sake of compensation. Compensation is one organizational system that impacts many organizational systems. It’s really the keystone that finishes the organizational arch and makes the organization strong enough to withstand external pressures.
- VUCA – Speaking of external pressures, compensation is stealing a military acronym for a crazy, evolving, global world: VUCA which means volatility, uncertainty, complexity, ambiguity. The loud and clear messaging around VUCA is a need to be flexible in anticipation of the external environment. PayScale’s first webinar of 2014 zeroed in on this very notion of flexibility, providing some ways to infuse compensation plans with flexibility.
- Performance – A lot of people were talking about performance, sharing strategies from no ratings systems to ranking, including ideas around calibration and communication. What’s the major consensus? We still think it makes sense to link performance and compensation, and most people still aren’t sure the best way to do so.
- Total Rewards mix – Perhaps because the conference brings together Total Rewards professionals, there was a strong emphasis on the need to develop an appropriate mix of Total Rewards that includes not just base pay, not just cash compensation, but all the monetary and non-monetary benefits and rewards used to attract and motivate to the various different segments of organization populations.
- Population segmentation – Finally, in recent years organizations have started getting more strategic about targeting their comp strategies so they are differentially rewarding the critical positions in their organizations. Population segmentation was a prominent theme at the conference, with some folks talking about identifying new ways of segmenting populations beyond generational/life stage/department, etc. The idea, then, is to tailor to those different segments. Engage the segments in defining what works for them.
I guess my final take-away is that increasingly, compensation isn’t just about compensation. It doesn’t exist in a vacuum. Money is money and, at some point, what’s more important is doing work you like with and for people you like, in a way that somehow makes things better.