Executives in organisations typically have a clear strategy and most understand that they need to actively build a healthy culture to support it. However, sometimes there are structural problems that employees face that can hold back organisations from achieving traction.
Some fast growing organisations are the culmination of mergers or purchases and have retained the conditions and benefit structures of the original components or there may be pockets of legacy benefits within the organisation. At the time of the restructuring, it is often the simplest to reassure employees that their conditions and benefits would not be touched. As time passes, there are many other critical aspects to address, often leaving the benefits “as-was”.
Different conditions and benefit structures in an organisation can be the source of much unhappiness – both at an employee level and at an HR level juggling differing standards, models, etc. Examples of some of these differences are:
- differing rules pertaining to leave
- differing long service awards
- differing employee benefit subsidies, e.g. medical aid or retirement funding
- differing work hours
These differences can create a festering “us and them” employee paradigm resulting in negative energy – energy that would be much better used in a positive sense being applied to building your desired culture and supporting your business goals. Besides the administrative costs to maintain the different benefit rules, this negativity can create significant hindrances to implementing chosen strategies as well as building a strong and resilient culture.
There are many reasons why organisations endure this burden:
- The perception that the emotional cost of changing conditions or benefits is too high due to entrenched beliefs. We fear that the opening of the ‘can of worms’ will unleash something even worse than the pain experienced now.
- A belief that employees would not be willing to “give up” anything they already have.
- A belief that energy (and money) is better spent elsewhere in organisation.
- A concern that unions will want to “cherry pick” and have the best of all worlds – resulting in a substantial increase in cost with no added organisational benefit.
- A concern that the cost of harmonising rewards and benefits will be excessive. There may be the belief that the organisation doesn’t expect any savings, only additional costs which the organisation would not be able to afford.
Do you recognise any of these issues – which are often untested “beliefs”? If you were to take a step back and ask: “What is it really costing us to keep the legacy of different rewards, benefits and conditions in place? Is it holding us back from some of our goals”?
You may find that:
☑ The impact of different reward and benefit sets may be impacting morale more than you realise. Being able to confidently say we are on the same team with an aligned structure could have a significant impact on aligning your people with your organisational objectives.
☑ The cost to provide a uniform reward and benefit set may not be nearly as much as you expect. We have found that there are usually compensating benefits one can take into consideration when streamlining. Some of the required changes may cost little to nothing as they have no direct cost to the organisation.
☑ Mobility of people across your organisation, especially if there are numerous separate business areas, may be greatly facilitated with one structure in place.
☑ Current complexity of administration as well as the ability of management to know and understand multiple systems could be greatly simplified.
☑ Relationships with the unions can often be enhanced if the process is undertaken with transparency, the sharing of intentions and the desire to build trust. Our experience has been that unions are willing to consider the changes if they can see the impact down to an individual level and ensure there are no unpleasant surprises once the changes are implemented.
How does one even start to tackle this?
We have found that due to each organisation’s unique history and the emotional charge around these issues, a holistic and transparent approach is required that encompasses the “numbers” as well as the “emotional” side. We would typically recommend a process that includes the following aspects:
- Audit of your current world to understand all the different benefits and conditions in place;
- Determine the reward philosophy and principles that would support an aligned organisation;
- Develop and cost scenarios at an individual employee level to:
- clearly understand the impact down to an individual level
- clearly understand the costs and implications of the different scenarios
- determine your strategy and approach in a way that ensures there are no unpleasant surprises
- Agree on the final approach and strategy. This would include the business case quantifying the costs and direct and indirect benefits to the organisation.
- Engage with employees in a way that ensures transparency and builds trust. This would probably require communicating at the collective and individual level with personalised communication.
We trust that this article has stimulated your thinking around this often overlooked, yet vital aspect to support organisations on their journey to have a healthier internal culture and to be more effective and competitive in the market place.
Llewellyn de Jager and Etienne Cilliers