Insights from IMPACT 2018: Designing a Rewards Program for Best Fit

Posted by Bersin insights on April 6, 2018.

Organizational rewards functions often alienate employees and undermine an employer’s brand. But there’s a flipside: High-performing organizations with rewards strategies that extend beyond compensation, benefits, and well-being. How can organizations optimize rewards programs to fit their unique culture?

Four out of every five rewards functions we surveyed need to focus on better executing the basics: Rewards programs in Bersin’s 2018 High-Impact Rewards Survey have a distressing Net Promoter Score1 of -15, and a full 80 percent of rewards organizations surveyed2 fall into the lower performance levels. During the 2018 IMPACT session “High-Impact Rewards: Why Don’t We Like Our Rewards Programs?,” Pete DeBellis, Vice President, Total Rewards Research Leader, Bersin, Deloitte Consulting LLP, discussed a way forward. “The definition of rewards has changed quite a bit over the years,” DeBellis said. “Revisiting and possibly expanding our vision of what a ‘reward’ is might be one lever we can pull to change that NPS score.”

Rewards programs are among the most fundamental endeavors employers can improve to enhance the employee experience. Whereas traditional rewards consisted of a paycheck and a standardized suite of health, welfare, and retirement benefits, newer programs include fixed and variable compensation, and holistic well-being—with rewards professionals who collaborate across HR and beyond as part of an integrated view of the employee experience.3

Taking a Holistic View of Rewards

Source: Bersin, Deloitte Consulting LLP, 2018.

Most important, mature rewards organizations listen, learn, and design offerings for their customers: They are six times more likely to use data and analysis to understand employee preferences.

Finally, high-performing organizations are what DeBellis called “unapologetically different,” with a focus on the best fit for their culture rather than broader leading practices.

Rewards “Best Fit” for Organizational Culture

Source: Bersin, Deloitte Consulting LLP, 2018.

DeBellis was joined by Susan Wilson, Manager of Total Rewards at Basic American Foods. The company, an 88-year-old food manufacturer with 1,200 employees, is in the middle of an overall transformation around its vision, culture, and products—and in the context of this transformation, decided to examine its rewards program. “Our rewards have been around so long that most people couldn’t remember when they were put in place,” Wilson said. “I love the term ‘evidence-based HR,’ but we had been using ‘gut-based HR’ to understand the effectiveness of the program.”

Wilson led a “rewards optimization” program to explore what matters to their employees in terms of their rewards, which she called “the most fascinating project I’ve worked on in my whole career.”

  • In the first stage, the company asked employees 19 questions to determine unmet needs.
  • In the second stage, the company measured employee preferences and costs around reward offerings, modeled changes and impact, and are currently developing a rewards package that better satisfies the needs of employees.

Changes include:

  • Piloting flexible work hours for the first time ever
  • Unbundling medical, dental, and vision plans
  • Introducing a new paid time off (PTO) policy
  • Bringing in a communications specialist to help manage the change

“The notion of ‘employee as customer’ means treating them like customers, valuing them, caring about their experience doing business with you, and asking employees what they want instead of assuming we know what they need and what’s best for them,” DeBellis said. “It’s a significant shift in mindset but one that offers equally significant potential for improving rewards programs and the overall employee experience.”

Keep up with the conversation! Check back with our blog for more Insights from IMPACT 2018.

1 “Net Promoter Score” (NPS) is based on the fundamental perspective that every company’s customers can be divided into three categories—promoters, passives, and detractors. By asking one simple question, “How likely is it that you would recommend [Company X] to a friend or colleague?” you can track these groups and get a clear mea¬sure of your company’s performance through its customers’ eyes. Customers respond on a 0-to-10-point rating scale and are categorized as follows: “Promoters” (score 9 to 10) are loyal enthusiasts who will keep buying and refer others, fueling growth. “Passives” (score 7 to 8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings. “Detractors” (score 0 to 6) are unhappy customers who can damage your brand and impede growth through negative word of mouth. To calculate your company’s NPS, take the percentage of customers who are promoters and subtract the percentage who are detractors.

2 High-Impact Total Rewards Survey, Bersin, Deloitte Consulting LLP, 2018.

3 (1) Seven Top Findings for Redefining Total Rewards, Bersin, Deloitte Consulting LLP / Pete DeBellis, 2018; (2) The Total Rewards Maturity Model, Bersin, Deloitte Consulting LLP / Pete DeBellis, 2018.

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