So, the game is changing. The recession has ushered in a host of changes to the employment relationship, many of which we are just beginning to grasp.
On the reward front, asI mentioned last week, many employers are using the economic crisis as an impetus for hitting the reset button on their compensation programs. The experts predicted it, and I am watching it happen from my own ringside seat. The biggest outcome of that reset button being hit: A shift in reward emphasis from fixed base salaries to variable (incentive) pay.
Yes, there continues to be interesting debate and discussion on the interwebs about the value and viability of incentive pay, but here in the real world where the rubber hits the road and businesses are fighting to remain viable, this is happening. With agility surfacing as an essential ingrediant to future prosperity (even survival), organizations will need fluid, flexible cost structures and talent pools to succeed. And this kind of flexibility simply doesn't come by putting the bulk of our discretionary reward dollars into fixed base salaries.
But here's what I think is an interesting sidebar to this trend: The changing game is a door that will, and ultimately must, swing both ways. If employers want to put employees' cash compensation at greater risk by tying it to performance, they will have to support this new game with increased transparency and education. Employees whose pay is increasingly tied to the success or failure of projects, business units and even entire organizations will increasingly demand the information and help they need to track and understand that performance.
Hopefully, employers appreciate, understand and are preparing to address their own obligations and risks in this new game.
Interesting times are indeed coming.