The Changing Face of Reward Communication

In the last two decades, we have seen major evolution and changes in both the structures and the principles of employee rewards. The main reasons which have resulted in the same are significant changes in some of the environmental factors – such as industrial scenario, increasing globalization, labor forces, market conditions, statutory laws and tax structures.

Consequent to the same, both employer aspirations and employee expectations have been undergoing changes, and with a highly dynamic workforce and competitive market place, even the communication that goes from the organizations to their staff has seen changes.

In line with the above development and progress in the corporate environment, there could actually be 3 different types of communication that could go the employees, and the same would also be a reflection on the state of the organization and their response to business:

• Traditional Approach:

  In this approach, the employer would tell what exactly they would like their employees to “know”. The typical messages that would be conveyed here how salary is structured and paid to ensure all the norms and statutes are followed, with a focus on base pay with periodic merit adjustments, cost of living corrections made in the salary and that the same is paid to them for rendering their services.

• Transitional Approach:

  In this approach, the employer would focus on what they would want their employees to “feel” as a part of the employment contract. The type of messages that would go here are fair and just pay for the work the employees do, hence market equity, internal pay parity, variable and bonus pay become important in conveying that what they get is related to their job responsibilities, market factors and output.

• Transformational Approach:

  In this approach, the Employer would focus on what they would want their employees to “do”. The messages that would go here are ensuring that their staffs perform their work towards specific business results, focus that it is only business results that will drive pay. The fine message that the employer sends here is that they would look at the return on investment (ROI) values on their human capital.

  Today, all organizations must review and introspect, at what stage of business cycle and people maturity they are in, and accordingly fine tune their employee communication programs.

  Eventually, what is going to matter is the ability to create that balance between achieving Business needs and meeting employee expectations for a sustainable and scalable organization.

  It is imperative to remember here that employee communications form a very important and integral part of successful and impactful employee compensation and benefits programs.