Today’s reward landscape seems to be more challenging than ever before.Never have we seen so many evolutions occurring at the same time. As a consequence, there is a huge need to further professionalise the reward function. Important instruments in this respect include training and networking.
This Teneo conference will provide you with interesting testimonials, insights into research results, and multiple opportunities to
exchange opinions and practices. In our opinion, the reward strategy is at the heart of successful reward management. Based on an in-depth analysis of the business context, choices have to be made and have to be made explicit regarding how much to reward, how to reward, and what to reward for.
Today, only a minority of the firms have such an explicit reward strategy. However, this reward strategy serves as the main guide for developing reward systems, but also as the general philosophy for developing local policies, for the dialogue with unions, and to explain the reward systems’ underlying logic to employees and line managers. In this respect, it is a very important instrument.
Taking one step back, C&B professionals should be aware of the multiple changes in the external business context as well as the
internal business context. These context factors serve as main input for developing the reward strategy. As far as the external business context is concerned, we see a lot of changes in the regulatory framework.Furthermore, the economic situation is more unpredictable than ever. As a consequence, reward systems have to be more flexible.
As well, important changes are taking place on a social level. Different generations at work and keeping a greying population longer at work, preserving their motivation and productivity, are the main challenges here. I am convinced that we need to fundamentally rethink our reward policies and systems from the perspective of this changing business context.
On the level of the implementation, we also see a number of challenges and trends. Firstly, budgets are more limited, leading to a shift from fixed to variable remuneration. Secondly, more and more companies are offering flexible benefits, in which employees can make choices in order to better adapt the benefit to their personal needs. And last but not least, one of the most important issues is to improve employee knowledge in the field of their remuneration. This leads to a higher appreciation and will improve the ‘return on reward investment’.
Xavier Baeten – Professor of Reward Management Vlerick Business School