"Managers—The Missing Link in the Reward Change Process"

Thomas Davenport and Darryl Roberts

Journal of Organizational Excellence

Spring 2005, pp. 3-16

Many organizations are making large-scale changes in the rewards and benefits they provide to their employees. Often, these efforts are not very effective in increasing productivity, reducing costs, or improving employee commitment.

This article provides five requirements to make these efforts successful:

• Establish a thorough analytical basis for rewarding change—Collect data from employees first, before making changes based on guesswork
• Give managers information and build their skills to convey it—Managers should understand the change thoroughly and be prepared to answer questions from employees
• Consider rewards and reward changes holistically—Studies show that employees view their reward portfolios through "generalized impressions about how much the organization values their well-being"
• Understand and respond to change management requirements—Variations in the source of change, the pace of change, the direction of change, and the magnitude of change will all influence the approach organizations and managers should take
• Ensure the reward change process is fair—changes should be applied consistently across time and people, remain free of bias, be based on accurate information, conform to reasonable standards of values, ethics and morality, and take into account the opinions and suggestions of the people affected by the decision or change

The authors state that managers can contribute to making reward change a success in three ways:

• Participate in reward system design and restructuring—Managers are aware of how changes will likely affect their employees, the managers' own concerns about the change will be addressed, and the managers will have added credibility and understanding of the change
• Reestablish an energizing deal—Manager involvement leads to more feeling of ownership of the change
• Demonstrate individual fairness—This is done through consideration of the individual employee's viewpoint, consistent application of criteria, justification for the change, truthful communication, and courtesy in delivery of the message

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