Are we getting a ROI from our reward programmes?
As with a medical check-up, reward check-ups are done at different times/stages to check the health of the ‘patient’ (which for us are our reward programmes), checking that there is nothing which can cause short or long term problems. So how do you conduct this check-up? Here are the steps I’ve followed over the years, which I hope you’ll find helpful when you next conduct your company reward check-up.
Step 1: Determine which rewards to test
This is the starting point for your check-up, determining exactly what you’ll be testing. Will you check all reward programmes at once, alternate them from year to year, etc.? There is no right or wrong answer to this, as it depends on factors such as:
● When did you last conduct a check-up?
● What were the results of your last check-up?
● Have things changed much since your last check-up (either internally or externally)?
Step 2: Determine your test criteria
The test criteria are the factors you’ll use when conducting your check-up. Think of them as the tests your doctor conducts on you for your check-up such as checking your weight, checking your blood pressure, etc.
Here’s a model/approach I created over the years which I call the 4 C’s wrapped up with a big E (I know, I really do need to give it a better name!). The way it works is that each letter stands for a different test that should be performed for each reward element. Below I’ve shown the letter as well as the question you should be asking yourself/testing when you review against each reward element.
C = Competitive - Can they compete against those offered by your competitors in the marketplace?
C = Compliant - Are they compliant with local legislation/ regulations?
C = Cost-effective - Are you getting the best fees/rates?
C = Culturally aligned - Do they align with your company’s culture, values, etc?
E = Engaging - Are they engaging to your employees?
Step 3: Determine your scoring system
Next you need to decide how you’re going to score (or rate) each of your reward programmes against your test criteria. In the past I’ve used a traffic light approach to scoring (green = healthy, yellow = watch, red = take action). This is a very straightforward approach, and easy to visually show and explain.
Recently I decided to use another system, which is a 5 point scoring system. I did this partly because I wanted something a bit different, and partly because it was my first time conducting a check-up at my new company, and I wanted to go a bit deeper into the health of the reward programmes.
The 5 point scoring system relates to athletic levels, as I felt this analogy would work for my leadership team. This is what I’ve used: 5 = extremely fit/olympic athlete, 4 = very fit/better than average, 3 = average fitness level, 2 = below average/changes to be made, 1 = extremely unfit/cause for concern.)
You decide which scoring system works best for you . . . either of these or your own creation!
Step 4: Conduct your check-up
The next step is to actually conduct the check-up. The key to this step is to obtain the answers to each and every question from the testing model for all of your selected reward programmes. For example, if you are testing all benefit programmes, make sure you have explored the 4 C’s and E for these so that you can assign a score for each. This is the step that takes the most time, as there is often a lot of information to collect from a wide variety of sources.
Step 5: Report on your findings
This step can be the most challenging, as often you have so much information to present it can be a bit daunting. Here’s some tips to help you in presenting your findings:
● Think of the communications pyramid - in my book (Effective HR Communication) I talk about a communications pyramid, which is an approach used to help you prioritise your messages. You’ll find this approach helpful as you present your findings - first starting out with your key message, then your next most important, and so on. This ensures that you get to the point quickly in case your audience does not read the entire report (which can be quite lengthy).
● Be consistent - another point I make in my book is about consistency. This is especially key in a lengthy report, as it makes it easier to read and focus on where to go for the various pieces of information. For example, if you are presenting on multiple reward programmes, use the same structure throughout - e.g. introduction, summary of findings, recommendations.
● Present value-added information - our role is not only to present findings, but to make sense of them. This is key in the report, for as experts in rewards, our leadership team is relying and counting on us to add this level of value. So look for opportunities to add this value in what and how you report your findings - e.g. explain what the data means, make connections with other data in the business and present recommendations.
● Think about how you say it - this final point is key, and the answer will differ from company to company. The point here is that often it’s not just what you say that makes a difference but how you say it. Think about how you present your findings and your recommendations, and make sure you are setting yourself up for success in how you do so.
My final point is that however daunting it may seem, as with a medical check-up, remember how important this process is. As Plato said ‘The part can never be well unless the whole is well.’ The aim of this is to make sure that each and every reward ‘part’ (programme) is well, so that the ‘whole’ (total reward package) is well.