I was at my friends’ home recently, and the children were busy preparing their letters for Santa Claus. They behaved well during the year (well, most of the time anyway…) so were writing their wish list for Christmas.
Of course, I don’t believe in Santa Claus any longer, but it got me thinking about what would have the most impact on Compensation & Benefits in the coming year.
My 6 wishes are centered mostly on 2 topics : performance management and governance.
My first 3 C&B Christmas wishes : Performance management
I won’t cover fancy trends such as “social” and “gamification”, nor will I go into the headline-grabbing “let’s get rid of appraisals” theme. Instead, I’ll stick to the basics of good performance management.
Performance management is the one area in the company that, when executed well, can have a true and long-lasting positive impact on business results, employee engagement and retention, and company culture at the same time.
In order for it to move away from the painful, administrative “HR chore” that most employees and managers resent at year-end when they sit together, often for the first and only time of the year, 3 wishes need to be fulfilled.
C&B Christmas wish number 1. Real top management endorsement.
That means that the senior-most executives truly embrace a culture of openness and cascading the organisation strategy and goals.
If there is a performance management system /HRIS in place, they should lead by example and use it for setting and tracking their own objectives as well as those of their direct reports.
Showing commitment to performance management also happens when senior leadership regularly communicates about progress and/or setbacks.
C&B Christmas wish number 2. Educated and skilled people managers who are given time to actually manage their people.
Line managers need to understand, and practice, giving regular feedback to their team members.
Of course, HR can help by giving technical training and coaching to supervisors in order to help them get more comfortable in delivering effective feedback and handling the sometimes uncomfortable conversations that are needed when an employee does not deliver as expected.
I believe however that an equally effective approach is to evaluate team leaders on their people management skills. Make a significant portion of their own performance rating related to their capacity to give feedback and manage performance in their team, and just as importantly, give them the time and tools needed to perform this significant activity.
This will reinforce the message that PM is a most important success factor for the organisation.
C&B Christmas wish number 3. Employees fully engaged in the process.
Employees should feel supported by the performance management approach.
You have to create a culture that encourages open conversations between employees and managers. That means that your system must empower them to really discuss, and thereafter agree and embrace, their objectives.
And during the year they won’t hesitate to report questions or issues to their manager if they can’t solve them by themselves. Given that objectives are properly cascaded in the organisation, sorting issues moves everyone (employees, managers and as the result the whole organisation) in the right direction.
My other 3 C&B Christmas wishes : Governance
Corporate governance is the other area that can have a massive impact on Compensation & Benefits. Often, the impulse comes from new rules and regulations, but a lot can be done on a voluntary basis by organisations themselves.
Here are 3 wishes :
C&B Christmas wish number 4. A professionalisation of the Director role.
Currently there are no legal requirements in terms of education and experience for someone to bcome a Board Director.
Trainings and certifications would help ensure they are equipped with the appropriate knowledge to make decisions that affect the strategy of the organisation and therefore its future and that of its employees. In particular, a thorough understanding of the legal environment, risk management and business and technology constraints are essential.
As far as Compensation Committees are concerned, Board members who have an understanding of human psychology and behaviour, executive compensation and new regulations (especially in the financial sector) are essential in driving remuneration programs that will support the achievement of the company’s goals in an effective manner.
C&B Christmas wish number 5. Directors that are more involved in the organisation.
As independent Directors become full professionals, they focus their time fully on the organisations they are on the Boards of. Being a Director becomes a full-tie job, not a nice add-on sought for prestige, networking or extra remuneration.
More time spent in the company or investigating its business environment and networking in the industry means the Directors will be better equipped to make the decisions required of them.
Of course, as Directors become full-time professionals they will receive appropriate compensation, maybe regulated, instead of the fees they currently receive for attending the Board meetings – usually on top of their “day” remuneration for their main job at another company.
C&B Christmas wish number 6. Increased diversity, starting with more females in Boards.
Diversity is a necessity everywhere in the world.
The UAE is one of very few countries that has announced mandatory representation of females in Boards including for government entities.
I believe this kind of move creates opportunities for more talent to filter up the ranks. If we included even more limitations on the numbers of Boards a UAE National can be a member of (currently 5 public joint stock companies), that would open even more pipelines of talent across the country.
In any case, more diversity in Boards quickly permeates through companies. Organisations have to strengthen their development and inclusion programs, identifying and growing more talent. They have to better communicate their Employment Value Proposition with external stakeholders to be attractive not only to their future leaders, but to their Board members as well.
This will often mean a review of the compensation, benefits, incentives and rewards programs.
And more diversity in Boards will also reflect in the decisions being made.as a way to align with the needs of a more varied leadership and management. Compensation Committees may focus on new or different components of the pay package in the organisation such as flexible or part-time working, parental leave, work-from-home schemes, alternative criteria for promotions…
So as you can see, through internal work on one of its most important people processes, performance management, and its governance structure, a company can significantly change its HR and Compensation policies.
I hope to see some of these changes take place in companies in the UAE and across the GCC as I believe they would bring strong competitive advantage to the organisations that implement them.
Which Christmas wishes would you add to this list ? Hit the Comment button and share your views !
Related posts :
- CEO for a Day at your company ?
- Board and quotas – For or against them ?
- What are the benefits of a good Performance Management System ?
A slightly different version of this post was first published in 2012.
Image from Carrie Beckhort