The New Normal in Rewards - Going the E-commerce Way
Some of the rewards which don't seem to be existing or valued today, may find a lot of relevance in the long term
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The internet/ e-commerce sector is buzzing with news again. Well, did it ever stop buzzing...news of consolidation, funding rounds, valuation and devaluation, pay packages - both on and off campuses, practices which invoke trust, belonging and value creation not just for self but for a larger purpose.
In our course of working with several clients, we felt few things which make this sector tick and the parallels we could draw with rewards:
Inward Looking vs. Outward: Most times, when we create something, we are trying to solve a problem, well new concepts may not always be about that in this sector. Whether it is about finding a doctor with a particular specialty or in a particular locality, if this even existed as a latent need or earlier may be people used to go to named and listed. With lifestyle changes, the need has been created and we have several answers to a question. Something as simple as fulfilling your grocery needs, we have moved from sabjee mandi to local hopcoms to hyper cities and to online providers - in a way the need was created again in line with changing times. Hence the sector is about not just solving for a problem but really about creating a need tying it closely to lifestyle.
My take on rewards here is that it is not only about the evident pay for the position (base pay) or the performance but really against the higher order not so evident expectations which may not be explicit. Clearly, some of the rewards which don't seem to be existing or valued today may find a lot of relevance in the long term - like investment in employees' health (both wellness and wellbeing) as well as wealth (for post retiral sustenance), so the idea is employer sponsorship for enhanced understanding and facilitation of some of these rewards avenues.
Spoil us for Choices: It is a lazy Wednesday and my favoutire pizza joint offers a lovely buy one, get one and I am sorted. Hang on! There is a "" menu which offers 'lovely Wednesdays' with my favorite Italian options, I was just about to click that when another ad popped up enabling delivery from my 'to die-for' Italian restaurant! OMG! Am I not spoilt for choices?
Come rewards and our age-old concept of basket of allowance is giving way to the new-age flex benefits! We are not far behind in offering choices of rewards.
Here and Now to Long-term: We are often referred to as 'here and now' generation - instant coffee, instant noodles to more luring instant poha; instant gratification is the name of the game. But one very accomplished CFO once shared - why do we try and reward instantaneously through hefty base pay increases in this sector - shouldn't the value of work, ability to make an impact, creating something next gen be of value in itself. Set me thinking for sure. One could make the pay check balanced for financial security (which itself could mean different things to different people) but keep the work value highest in the order.
Long-term impact is also related to long-term rewards and LTI has seen a lot of evolution across tools from ESOPs to RSUs to Performance stock, timeframe from three years with annual vesting, quarterly vesting and so on, performance indices ranging from tenure to value-creation to wealth-generation for stakeholders.
1. The definitions of work and worker have undergone a metamorphosis with the advent of the sector and growing digital - from defined to soft and fuzzy:
2. Traditionally, work would be set of activities performed in a defined environment, with a defined set of resources and defined outcome. Who did it, was also clearly articulated. With super specialization coming into picture, we have super temps who could be engaged with multiple organizations loaning their expertise - like a pay per use model from an enterprise perspective but more importantly, richness of experiences adding to the excitement of the 'skilled incumbent'.
The work could be getting done in the absence of real resources - consider the taxi aggregators or the hospitality industry listing providers or storage through cloud, the list can be endless, the bottom line remains - business may not need to own resources to deliver work or value!
From rewards perspective - a lot more has come into the employment deal in addition to the hard coded compensation, benefits, careers and work -life: welcome to the 5th more elusive element - the emotional connect! Mercer research shows that the employers which leverage this 5th lever well, despite it being less concrete, enjoy greater dividend of retention and enhanced productivity and /or breakthrough contribution. The sense this inculcates is the employee being the owner with equal stakes (not just financially but emotionally vested!)
Rewards are undergoing a change and the user-experience is as critical as the product itself! Just like the match of the size, color, fit of that new dress you got delivered at your door step in time for Diwali, the rewards communique' is supposed to make the user energized about the fitness to the performance delivered, time at which it is shared and the feeling it permeates whether through a pay check or document or intranet - so focus on your total rewards communication people!