Communicating reward change

In most walks of life, if someone offers you more money, you would say, “thank you very much”.?And be pleased. This is because such a deal contains the three key features that we know offer the best chances of it being received positively.?First, the message is positive.?Second, it is immediate.?Finally, it is certain.?There is a book that covers the concept of how the combination of these three things create good outcomes.?But I am afraid, I cannot for the life of me remember what it was called.?So, I am unable to offer a citation.?But neither do I wish to take credit for the theory.?

With that unnecessary complex opening out of the way, we have created a good platform to talk about communicating reward change.???

The design of reward programs and policies is laboured over.?Usually for months.?The communication of them tends to be snuck into the four-day gap between Exco approval of the change and someone on Exco accidentally leaking news of the change on LinkedIn, or leaving a copy of it in the print room.?I am sure there are exceptions – but the general problem we encounter is that communicating the change receives insufficient consideration.?

Interestingly, much reward change is received by employees with suspicion, scepticism, or distrust.?Possibly, there is a link between how it is received and how carefully the message has been crafted.?Or it may be that employees are generally suspicious, sceptical, or distrustful?

Some mistakes we often see

There are four things that I think often create problems:

• Coyness around data source:?If we are telling a group of people that they are paid an amount of money that is within the bounds of reasonableness compared to the external market, we should try our best to be transparent about what that market is and how we desire to be positioned against it.?The expression “benchmarking” is irrelevant unless we can be clear on both points.?If we cannot be clear, then employees will assume you have used irrelevant data and opted for a lower quartile positioning against it.?It really is that bad.
• Cherry picking the message:?Reward is comprised (usually) of base pay, some benefits, often a bonus opportunity, a pension and maybe some element of long term pay.?The reality is that the total cost to employ is where it’s at.?And picking one bit out and shouting about it, creates a worry that something else is being ignored.?Valuing each part of the package is therefore key - because if you can’t value it, it has no value. Worst of all, however, is to try to tell people how much they should value stuff.?They’ll be the judge of what is valuable to them.?Just tell them what it is worth.
• Sweating the detail: ?The message is usually straightforward.?But we make it complicated by providing a huge, long list of extraneous details, that will apply to a tiny percentage of our audience. ?“What happens if I die?”?“What happens if there is a reconstruction or variation of our share capital?”?“What happens if I leave?”.?These are not FAQs.?They are terms and conditions.?Leave them in the small print.
• Mixed messages:?Have a think about what story you are trying to impart.?There are really only three games in town. If the reward change is additive and its new - it’s difficult to see why that shouldn’t be viewed as unequivocally positive.?Go large on this as your message. If the story is nuanced, then you need common “persona-driven” examples.?For example, if the change has some upside and downside within its make up, then you need to show how different people may be impacted.?Or if you are offering people a choice, and you want them to exercise it carefully and thoughtfully, examples show the nature of the decision that must be made. If the change is negative, then you need to be brief, honest and personal.

Sometimes the message is well crafted, but the presentation looks terrible.?Or reads badly.?This is a silly ball to drop.?Communication is an art – and you should take a moment to deploy best practice.?It will be time (or money) well spent.

What’s the hardest message to communicate??

I have thought long and hard over this.?With recent pay reviews landing, it would be tempting to say the communication of a sub inflation pay review to a population offers the most challenge.?But, in reality, this has proven to be well within the art of the possible. And there is clearly a difference between the message being unpopular and the communication of it being difficult.

It leads me to conclude that the hard piece relates to the communication of performance. ??Whether company, team, personal or related to bonus metrics or long-term incentive plan performance conditions.?In fact, it’s the one area where the standard rules of communication are somewhat trickier to apply.?Why is this?

• Different stakeholders are often given different messages about how good performance is.?Sentiment is all – but congratulating your people for another year of hard work and success sits oddly alongside a smaller bonus pool or reduced profit (and let’s get real - it is very possible to experience a year of hard work and success and have a smaller bonus pool and reduced profit).
• Assessments of performance are often an exercise in discretion, variation, and adjustment.?Combined with a huge reluctance to provide any in-flight assessment of how things are going.?
• In the cold light of day, Free Cash Flow is important, but not many people know how to calculate it.??The same with Return On Capital Employed.?I can’t knock it as a measure.?But I don’t think its front of mind when a business is thinking about buying a new carpet.?The definition of performance on these facts just does not resonate.

There is no easy answer to this.?But my one steer is to think about the communication of performance during the design process of your reward change.?If there is any suggestion that participants may not understand the message, it’s probably not the right message.?Which makes worrying about how to communicate it, the least of your problems.