A foundation for success Modernising reward strategy and practices to support business and employee performance A Hay Group case study
“We accepted 95 per cent of Hay Group’s recommendations there and then because they were so well thought through and the benefits were described so clearly.” Group HR Director
With employee retention and engagement declining, this global FTSE 100 company realised its approach to reward needed updating. Hay Group was invited to review the company’s current reward strategy and recommend ways in which it could be enhanced as part of a new integrated business and people strategy. The result: the company now has a solid foundation for the for future of their reward structure that is cost effective, helps to drive performance and engages employees. A number of challenges faced this FTSE 100 company that prompted the need for change. Sweeping changes in the sector over the last 10 years were not reflected in its approach to reward. Employees also wanted more transparent, consistent and flexible packages and had started to express their dissatisfaction with the existing offering through leaving the business. Furthermore, in response to challenging economic and market conditions, the company needed a cost-effective approach to reward to help boost employee performance and retention. Through a competitive tender process, the company selected Hay Group to:
conduct a thorough assessment of its existing reward practices using Hay Group’s leading reward strategy review process, to determine how effective the approach was in supporting the success of the business and how it was viewed by employees and management
provide recommendations on how the reward offering could be enhanced to increase its value in the minds of employees and better represent the organisation’s brand, without increasing the costs of provision to the business.
The findings confirmed the need for change and our recommendations, whilst sometimes challenging to this company’s traditionally held views, were largely accepted by the board. Now, the organisation has a firm foundation on which to build a reward structure in line with their objectives and a clear implementation plan.
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A Hay Group case study | A foundation for success
“Our Hay Group consultant’s insight, pragmatism, flexibility and friendliness made him great to work with.” Group HR Director
An opportunity to modernise This FTSE100 company saw an opportunity to modernise its reward practices. With operations across the UK and France, it had historically relied on an informal and locally driven approach to HR issues. However a new HR director recognised that while the world of work had changed in the last 10 years, the company’s approach to reward had not. Despite tough economic conditions, employees’ expectations had become more demanding, looking for jobs that suited their requirements and rewards that would flex more to their lifestyles. Due to the way in which reward had evolved, there was also a degree of mistrust in the business as practices were known to be applied inconsistently and reward communications were non-existent. To further complicate matters, the company had forecast low growth for the next three years and did not want to lose the high-potential employees that were helping to lift it out of recession. It was essential therefore that the reward budget was targeted to where it would have the best impact on the business and employee engagement. Having kept in contact following the successful delivery of an earlier project, Hay Group was invited to review the company’s reward practices. Four specific goals were identified:
develop reward policies and practices that support the objective of becoming a high-performance organisation
deliver the maximum impact from the lowest reward cost
create a simple approach to incentives tha