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Can reward really rebuild trust?

Organisations having to make many difficult decisions can find themselves hostage to the new economic realities. In turn, employees have been subject to the actions of their employer with little opportunity to influence things for the better. Stuart Hyland, UK head of reward consulting at Hay Group, explores the theory that reward can rebuild trust.

When employees are asked about which aspects of their total reward package they value the most and why they want to stay with their current employer, two of the most commonly quoted responses are ‘colleagues’ and ‘culture’. However, these two areas were early casualties of the recession.

The latest research, Which way now for reward? demonstrates that in a world of redundancies, pay freezes and bonus cuts, feelings of security and trust have melted away. As a result, employers are left with a tough task to maintain and motivate their staff in a way which is consistent with their wider consumer brand and market image. When employees are asked about which aspects of their total reward package they value the most and why they want to stay with their current employer, two of the most commonly quoted responses are ‘colleagues’ and ‘culture’. However, these two areas were early casualties of the recession. Many employees will have lost colleagues and friends through cost reduction programmes and the pull of ‘colleague affinity’ as a retention factor is likely to be at a low ebb. In addition, many employees are now working longer hours than before – as budgets have remained tight – and social opportunities have reduced in frequency, so there are fewer chances to strengthen or build relationships with those who remain.

Organisations have had to behave in ways which are quite simply counter-cultural for all of the best reasons, including their very survival. Headcount reductions, cost tightening, pay freezes and bonus scheme withdrawals have been a common activity in recent years – even where this has gone against an organisation’s history and cultural legacy. However, these actions cause significant damage to the employer/employee relationship and can destroy trust which has been built up over many years.

For example in one organisation, employees are now highly distrustful of their management,believing that as they made people redundant once they could clearly do it again. This is despite the fact that the redundancy plan was the first in the organisations 150-year history and was implemented as a last option to help protect the future of the company. While profit levels are now on the increase, employees remain almost resentful of their management team and every decision is treated with suspicion and caution. Their brand as an employer has been severely damaged and they must find ways of repairing it for the future good of their business.

Historically, if the employer brand has been damaged to this extent, with employees holding negative feelings about the organisation, then they would have simply found new roles elsewhere. However, this is no longer an option for many in the current environment.

Due to continuing economic challenges, people are now finding themselves ‘trapped’ in their current jobs as external opportunities are limited or non-existent. Emotionally they might want to be elsewhere, but they find themselves in a situation of ‘forced engagement’ where, in the absence of other options, they have to stay committed to their current role, albeit in a mind-set of ‘grudging loyalty’, as they do all they can to protect their job.

Employees – brand advocates or opponents?
This situation might sound like a worst-case scenario, but in fact it is an all too common occurrence today. The actions taken in the past to help protect the financial future of an organisation may actually damage chances of recovery. If your own employees are not amongst your strongest advocates in the market place then it raises questions as to who will be? If your own people will not recommend you as an employer, then they are not likely to recommend your products or services and it will not take long for this to have an impact on buying habits. In the past these impacts might have been highly localised, but the continuing strength of social media and other online platforms, including independent review web sites, means that any negativity will not stay local for long and the reputational impacts of a disaffected, mistrusting workforce could be significant.

Brand alignment
Against this fragile and delicately poised backdrop many organisations are now beginning to rethink their employer brand. Indeed, our research demonstrates that organisations are looking at ways in which they can rebuild loyalty and create a more positive working relationship with their people. However, in this age of integration and connectivity, this cannot be looked at in isolation – organisations must also consider the external consumer brand. In attempting to deliver this alignment, it is essential for an organisation to understand the extent to which they can actually control their employer brand. In reality, an organisation can only hope to influence their brand in a particular direction, it is the employees, and externally, the customers, who will determine what this means to them. But this does not mean that the organisation has to be a powerless passenger riding on the perceptions of its people.

They can be proactive and help to influence opinion. This is a journey that begins by determining their brand vision, which must then be combined with an understanding of their current brand position. This is best achieved through surveying employees and scanning the various social media for feedback (good or bad) from employees. With knowledge of the starting point and the intended destination it then becomes possible to plan the journey. The important point to note here is that this will take time. It is not something that can be achieved within a single year, but should be an on-going process of measure, develop and review. It also needs to be flexible and able to respond to employee perceptions and the rate at which they might be changing.

The objective for a total reward strategy is, in most cases, a variation on the theme of aligning the success of the employees with their employer. Furthermore, it will aim to reward those who contribute to that success in a way that is consistent with the values and principles of the business. Whilst the intent might be simple, achieving it can be a complex and challenging process. This has been known to deter organisations from change, but inactivity may not be an option as the pressure for a more effective, leveraged and motivating reward approach increases.

Employees can receive these developments with distrust and as a consequence they may try to resist change. The process can very easily become confrontational and, managed badly, could cause further damage to an organisation’s reputation with its own employees and in the external market. However, it does not have to be like this. Whilst the specific needs of every organisation differ, there are a number of principles that can be followed to help re-build trust with employees:

1: Be predictable and give notice to employees when you can’t be. Predictability builds trust, as employees know what to expect. If this is not possible then give notice and keep the lines of communication open.

2: Walk the talk. Make sure your message is clear and embraced from the top down. An organisation cannot afford to have some parts of the business excluded from the process. Consistency implies a sense of fairness that helps to build trust.

3: Show belief and faith in your workforce. Ask employees for opinions and ideas on how the company can reward more effectively and show that you believe in your employees by giving them a significant voice in the design and implementation process.

4: Be as transparent as possible. Being as open as possible and explaining why the organisation needs to change its approach to reward is critical. If people understand the need then they are more likely to accept change, even if they do not like it.

5: Keep talking and keep listening. Encourage a dialogue with employees and give them opportunities to comment and to offer feedback. This activity should continue even beyond implementation to ensure that the changes are having the desired impact – driving benefits for employees and for the business.

Opportunity to move forward
Rebuilding trust between employers and their workforce is a complex and delicate process. However, it is a great opportunity to engage employees and create a shared sense of purpose with them. It should be a highly positive experience that re-enforces and re-energises a damaged employer brand, which will then have a positive impact on the way an organisation is perceived internally and externally. There is no single silver bullet which can achieve this success, but with careful planning and particular attention to communication, it can be the process which helps organisations and employees stop dwelling on recent history and focus on creating a positive future.

Stuart Hyland, UK Head of Reward Consulting
Hay Group

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