Even the best reward practices can be undermined if managers lose respect for the system. A reward system needs to not only to be fair, efficient and reasonable, it needs to be seen as such. Given the emotions and technical complexity associated with reward practices, this isn't easy!
Even the best run pay systems have problems when managers or employees:
- Feel they're underpaid, based on anecdotal information
- Mistakenly think that job evaluation values the wrong things
- Think HR's rigid rules are preventing them from attracting, retaining or motivating talent
- Think they're owed a meaningful pay raise every year
You can undoubtedly add to this list of problems.
In all cases, these misperceptions lead to dissatisfaction and pressure for HR to bend the rules to accommodate a particular case.
Good reward professionals know that dissatisfaction, however unjustified, undermines their goal of attracting, retaining and motivating talent. They also know that bending the rules to address a particular case can undermine the integrity of the whole system, which creates justified dissatisfaction and inflated costs.
How NOT to respond to complaints about your reward practices
When under pressure to bend the rules there are two things HR should not do:
- Give in to the manager so they can solve the particular problem
- Tell the manager they can't do what's requested because of the rules
Bending undermines the integrity of the system; once you start making exceptions it's hard to stop.
Hiding behind a rule book undermines respect for the system. It implies bureaucratic rigidity, rather than a focus on doing the right thing for the organization.
Solve the real problem
The best approach is to treat requests to bend the rules as if the manager were saying: "I have a business issue, help me solve it."
If it's a business issue, the place to start is not with the rules that govern pay.
Start by digging to identify the real issue, then exploring solutions and determining the long-term implications of any proposed actions.
With pay, often what seems like the right thing in the short-run is harmful in the long-run. Once a manager understands that, they'll have new respect for HR's position-a good start!
The real payoff only comes when you help the manager find a workable solution. The solution may not be perfect, but if the manager walks away feeling HR has helped them find a path forward, and recognizing that the pay solution they originally had in mind was untenable, then HR has done its job.
The importance of authority
A good reward system has a technical component and a judgment component.
You can and should explain the technical element, for example how your pay policy is based on a study of salary survey data.
However, you'll also need to communicate that at certain points, decisions will come down to a matter of judgment. This can be a tricky moment because it opens the door for the manager to ask that their pay matter be ‘judged differently'.
It may seem like an easy way out to them, but if HR judges differently for the people who complain the loudest, then the system's integrity fails.
So HR must have two elements in place beyond the technical solidity of the system:
- Judgments must be made by respected people with authority in the organization. A manager can disagree with the call, but will not disagree with the authority's right to make the call.
- There needs to be some kind of appeal process. If a manager feels a pay judgment was incorrect then they need to be able to make their case. In a good system those appeals will often be denied because the original decision was sound. But the appeal process needs to exist.
Sports fans will understand how authority works. Referees work within a technical system of rules, but sometimes have to make a judgment-and their judgment is accepted as authoritative. In many sports there is a limited appeal procedure so those judgments can be reviewed. It's an approach that works well for sports and will work well for HR.
The importance of education and nurturing relationships
When a manager has a problem with compensation, you have their full attention; however their focus is on solving a problem where they see you as a barrier. That's a tough time to start building a relationship.
It's best to be proactive and meet with managers to discuss compensation before problems arise. Approach them ahead of time when you foresee issues, for example: "I see that in a few years some of your people will be getting close to the maximum of the salary range."
This gives you a chance to educate them about compensation issues before emotions come into play. Remember while these meetings are about education, they're mostly about building relationships.
The moment of truth for reward practices
The moment of truth for HR professionals however is when managers come to them with a problem. What happens here will determine whether managers walk away loving or hating HR.
If they see, first and foremost, that you work with them to solve the problem, while protecting the greater good of the organization, the battle will probably be won.
Back that up with a well-designed reward system, technical mastery of it, and the ability to explain why it works the way it does, and HR will emerge a winner.
It bears mentioning how much a good talent management system can help in this process.
- Self-service tools help to educate managers about reward practices.
- The ‘engine' of a talent management system frees HR from endless administrative tasks so they have time to build relationships with managers.
- Online learning can gently teach managers about why HR must fight to maintain the integrity of the reward system.
While reward professionals need to be good at the heads-down technical work, in the end, they win or lose on their ability to build good working relationships with managers.
They have to be tough and authoritative while being empathetic about the problems that managers face. They need to be creative in finding solutions without appearing to be willing to bend the rules at the first sign of pressure.
Rewards is one of toughest jobs in HR-embrace the challenge.
Your Turn: How do you work to build relationships
with the managers you support and help them better understand your reward