There's a lot we don't know about what life will be like as we continue through the recession, or when we eventually arrive on its other side. There's one thing we do know, though: that the business landscape will be different. Maybe profoundly so.
Assuming this to be true, we can also conclude that success in the future (near term as well as over the longer haul) will require organizations to be quick to respond to the threats and opportunities that show up, unanticipated, in their path. This, in turn, will demand a workforce with the flexibility to adapt to environmental demands.
Reward programs have a very important role to play in maintaining a workforce that is sufficiently fleet of foot. This is why I believe that agility should be the new watchword for reward design.
Agile rewards are those which carefully balance fixed reward elements with their more nimble variable counterparts. The agile reward package recognizes the importance of providing competitive base pay in exchange for a particular set of skills and qualifications (and a competent or better level of performance), but seeks to use non-fixed rewards (cash and non-cash) to accomplish most other objectives. These other objectives might include everything from recognizing temporary project-based outcomes to addressing the increasingly frequent need for people to step out of or up above their "normal" roles in response to changing circumstances.
A picture being worth many words, I use my reward portfolio diagram to illustrate this challenge:
In the past (and still today in some sectors), it was common and acceptable to reward many, if not all, of the performance elements listed on the left side via base salary. Agility demands that we provide a competitive base, but then - as much as possible - use other right side components to drive and recognize the results demanded of our workforce.
So .... got agility?
Image: Creative Commons Photo "Rainbow!" by Evoo73