A foundation for success - Hay Group

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Employees also wanted more transparent, consistent and flexible packages and had started to express their dissatisfactio
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.

2013 Hay Group. All rights reserved.

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 that suited different employee groups and roles



develop a job grading structure to help establish salary benchmarks and equitable, defensible arrangements.

Assessing reward effectiveness Hay Group’s reward strategy review framework was used to assess the company’s total reward package.

© 2013 Hay Group. All rights reserved.

A Hay Group case study | A foundation for success

“Hay Group helped to shift some deeply held opinions at senior management level. We have been provided with a practical development route map for the organisation to adopt. In addition, Hay Group has encouraged a selfhelp approach rather than making us wholly dependent on them for delivery moving forwards”

This review covered all traditional financial components of total reward as well as a number of highly significant non-financial, intangible elements including development and progression opportunities. The review included: 

members of the company’s HR team who were trained by Hay Group to deliver employee workshops across the UK and in Paris.



a local Hay Group consultant to deliver the sessions in French



the Group Board’s view on current reward challenges, their ambitions and their medium and long term plans and aspirations, explored through one-to-one conversations.

Having collated a wide range of data from across the business, Hay Group was able to analyse the strengths, weaknesses and opportunities of the current approach. Our total reward framework was used to ensure that the analysis was comprehensive, rigorous and looked at each individual area as part of an integrated entity. Our findings described the business case for change, including: 

employees were concerned about consistency, a lack of clarity and transparency – and the lack of a grade structure made internal moves and the development of a consistent reward approach very difficult



a clear need to do more to link reward to performance: the bonus scheme was seen as a guaranteed cash award (a ‘money-for-nothing’ scheme), while long-term incentives acted as ‘golden handcuffs’.

Group HR Director A firm foundation for the future Hay Group’s presentation to the board on the findings and recommendations sparked a valuable discussion, challenging some long-held views about, for example, the need for a grade structure and its potential format. Nonetheless, the company accepted the recommendations in Hay Group’s detailed development plan which was provided following the board meeting. It now has a firm foundation on which to build a reward programme that’s cost-effective, defensible and provides the right level of motivation to drive engagement and retention amongst its employee base. Employees also have reassurance and a clear understanding of the timings for improvements through a prioritised project plan which was delivered as part of this work.

About Hay Group Hay Group is a global management consulting firm that works with leaders to transform strategy into reality. We develop talent, organise people to be more effective and motivate them to perform at their best. Our focus is on making change happen and helping people and organisations realise their potential. For more information, visit www.haygroup.co.uk

© 2013 Hay Group. All rights reserved.