Pearls of Reward Wisdom

Ryan Johnson, WorldatWork's Director of Information Development and Public Affairs, and the author of the WorldatWork blog recently returned from the Chartered Institute of Personnel & Development (CIPD)'s reward conference in London and posted on a few of the presentations he attended there, including a presentation by Duncan Brown (former Assistant Director-General of the CIPD, now with PricewaterhouseCoopers) on Optimising the Strategic Benefits of Reward.

In his post, Ryan shared a couple of "pearls" from Brown's presentation that struck him, and I found them so compelling that I wanted to share them here as well (which I do below, based on Ryan's descriptions since I don't have the actual presentation materials).

• Simplicity.  Brown argued for simple reward systems, because design isn't the hard part, implementation is.  This is the absolute truth, and we often compound the problem by investing all our energy in design and then taking only a tired run at implementation. 

Post-script: A couple of my smart colleagues have challenged this point (see their remarks in the comment string); particularly the part about design being the easy part.  I don't mean to underrate the importance of a sound design, and I appreciate their pushing me to clarify this.  What I mean to address (and my apologies to Ryan and Duncan Brown if I am taking their points way out of context) is the over-reliance on design to solve ALL performance problems, which leads to complexity and loss of plan focus, and the imbalance I often encounter between design and implementation efforts.  One of the key lessons from CARS incentive plan research:  Design the plan well, but do a GREAT job of implementation.

• "Best Fit" rather than "Best Practice".  Simply brilliant.  Because effective rewards are relative and situational; what works "best" in one organization can be a disaster when force fit to another.

Duncan Brown.  My new hero.  I'll be looking for more on him to learn from and share here.

Comments

[Paul Hebert]

I agree whole-heartedly that best practice is a bad idea and best-fit is the way to go. I always look at best practices as "directional." Meaning that I will look at what they did to see if it has an application - with modifications - based on the context I'm working in.

I don't know if I agree as strongly with the "design being the easy part." While implementation is a issue - poor design is still a major reason programs and initiatives fail. That has been my experience.

[Frank Giancola]

Ann,

I guess that depends on how you define reward system.

I've seen some profit sharing and bonus plans that were incomprehensible to the average employee (and most people in HR) because the calculations of the bonus threshold and pool were very complex and required a deep knowledge of finance to understand.

I guess that's a design issue that could have benefited from simplification.

In other cases, doesn't a good design result in a simple implementation?

Frank

[Ann Bares]

Great comments, Paul and Frank - thanks!

Paul: I'm with you on the best fit/best practice question, and I do agree that best practices can give helpful directional input. The problem I see, is that people are oh-too-willing to simply lift and re-apply them without sufficient thought to situation and context.

On reflection, I think you are right to challenge the second point. It was made too simplistically. What I liked about it and meant to reinforce are two things: the over-attention to plan design as a fix-all solution, and the imbalance I often encounter between design and implementation. We get caught up in the design intricacies, adding element after element in an attempt to address every possible employee behavior (or misbehavior) until the reward plan threatens to collapse under its own weight, And then we basically overlook implementation - or figure that sending out a memo is good enough. Perhaps I'll add a clarifying postscript to this effect.

Frank: Your point illustrates exactly the "over-design" issue I am referencing. In my experience, getting too caught up in design can easily lead to the trap of over-complexity. Hence the Duncan Brown point that I see, at its essence, as being about balance. I have seen some very basic and not terribly insightful reward plans create tremendous success (in terms of award $s for employees and performance improvements for the organization) because of a masterful job of implementation and communication.