Q Employers often ask: Are we paying too high or too low and how do we recognise performance?

A: Yes Gayle, on the one hand the salary bill represents a significant cost factor in doing business and, on the other, business leaders wonder about their employees' perceptions of their pay, that is, 'it's fair, don't know or, I can do better if I look around.'

Q: As an advisor how do you go about advising employers on an approach to determining fair pay that also works in their favour ... in terms of meeting
business results?

A: Gayle, I really like the emphasis of the last part of your question. It addresses the most important outcome of any intervention in business processes ... results! This is always our point of departure when advising employers; rather than the 'warm and fuzzy' stuff often associated with us HR consultants. In this regard I also prefer the term, Human Capital, as opposed to Human Resources. Then the mindset shifts the focus from cost to strategic investment!

Q: How does this work in practice?

A: In summary, we would engage in the following implementations steps:
�-� Review the 'employment economics' of the enterprise, that is, the relationship between Human Capital investment, revenue and input costs. This helps us to test the financial sensitivity of our recommended approach
�-� Actively engage with our client in answering the questions: Where are we now in terms of current pay levels, both in relation to the internal distribution of pay as as the employment market well (the competition); where would you prefer to be and, how do we get there? The latter part of the question informs the budgeting process!
�-� This helps us to, what we term: 'get the base right', meaning; providing the framework for fair pay for the different levels and categories of jobs enabling an enterprise's capacity to attract and retain the necessary competencies in support of business objectives
�-� We are then able to add another layer of reward and recognition, namely, the recognition of performance of teams and individuals. This activity really begins to fine-tune the employee reward structure!

Q: Let's take a closer look at 'getting the base right'.

A: We design this process according to our client's specific needs, employment philosophy, current pay disposition and budget constraints. Our approach flows as follows:

• A critical review of the organisation structure in relation to its support of the stated enterprise strategy, the logical grouping of functions, roles and reporting lines
• Communicating the intended intervention to employees and its purpose, it is important to minimise misinformed pay expectations
• Review or preparation of role profiles.
• Determining job levels, using a formal job evaluation instrument, as informed by role profile content and other pertinent factors
• Sourcing pay data from the marketplace (using a formal survey linking typical pay levels by Job Grade and category)
• Creating a market-related preferred strategic positioning within the market
• Comparing the current pay levels with those indicated by the market
• Preparing a plan to resolve pay anomalies discovered
• Preparing policies and procedures governing the enterprise's approach to pay

Q: With the base right let's move onto the next layer, as you put it, I am intrigued by the really strategic stuff, namely, recognising and rewarding team and individual contribution to successful enterprise performance!

A: Gayle, this when a strategic approach to rewarding employees really comes into
its own! But, to implement the strategy to full advantage, in terms of driving enterprise performance, it will require a change in leadership philosophy and practice.

Q: In what way?

A: Well, to properly recognise and reward people, we would now be looking at encouraging employees or rather, team members, to become fully engaged in the business of the business. This means for team members to take full responsibility and accountability for their contribution to enterprise results. The emphasis changes fundamentally from following the job description, to focusing on outcomes: 'If this were my business, what would I do?'

Q: So, are you saying that the mind-shift will be from managing activities to leading team members in achieving results or, from inputs to outputs?

A: Exactly, and this shift really requires enterprise leaders, at all levels, to take a step back and to reconsider their leadership style. Leaders may need to let go, to change their focus from supervision to authentic leadership. Their job becomes one of creating a performance-enabling workplace culture where their role emphasis is to mentor and coach team members. In this regard we strongly advocate the notion of employee engagement as a critical competitive differentiator. We want to encourage and support enterprise leadership to move away from mechanistic 'management' of employee performance which often devolves into a corporate ritual rather than a genuine, valueadding activity.

Q: This could be a difficult transition for some, where any attempt to introduce what might be seen as a people-centred approach and therefore a challenge to their
comfort zone, could be met with resistance?

A: Our fundamental point of departure is that the proposed approach is driven by business imperatives, actually plain common sense. There is ample evidence that, what we refer to as 'engagement leadership,' leverages enterprise performance.

Q: I now see that a performance and reward intervention is a subject in its own right. Can you describe the key elements please.

A: The key to the process is team members understanding the basics of how business/ our business works; the Purpose of their work and the origins of performance measurement, as unpacked from hard business performance measurements. We have designed a simple but practical approach, pitched at appropriate team levels within the organisation. Leaders coach and mentor team members in delivering their contribution within this framework. From here we can move on to designing a performance incentive plan which will encourage and reinforce results-driven behaviour - sharing the rewards of entrepreneurial behaviour. The emphasis on performance incentives is on changing workplace behaviour rather than finding ways to pay more money, namely, investing in
people ... for greater returns.

Q: My immediate take on what you are advocating is that it represents an exciting
way forward for many organisations who want to grow but, it seems that only larger organisations or corporates would really have the financial and other resources to take on this challenge.

A: On the contrary Gayle, we prefer to work with smaller to medium enterprises; those that have been founded and grown entrepreneurially and find themselves either 'stuck in the middle' or having reached a critical mass or level of complexity requiring the introduction of best-practice ... without destroying the magic
that got them there in the first place. Generally, and with great respect, large corporates are harder to work with for valid reasons, including sheer momentum to be overcome, diversity of agendas, in-house resources (usually with more conventional perspectives), well entrenched rituals and the like. The exceptions to this rule are those with CEOs who are determined to break the mould in mobilising all the talent at their disposal in re-energising their business. In working with corporates we insist on working directly with the CEO, as the process champion. Of course, we will work closely with HR as they will play a key role in implementation coordination and continuity of the intervention. In any event, enterprises need to be convinced that the investment into such an intervention must yield significant returns from a business performance perspective.

Thank you Charles. This subject provides much food for thought and, I believe, for those enterprises that 'get it', an enormous opportunity to excel in their chosen business! 

DRG Outsourcing (Pty) Ltd
Tel: +27 (0)31 767 0625
Fax: +27 (0)31 767 3280
david@drg.co.za
www.drg.co.z