Client
Pan European defense supplier with a huge order book.
Solution
- Client sought external views and expertise on how PDRs are used, whether this is effective, and how else they could approach paying for performance in a fair and robust way.
- We facilitated a series of workshops with a group of 20+ people including the provision of thought pieces in advance.
- After considering the risk and opportunities, there was overwhelming support for decoupling pay and reward from PDRs.
Challenge
- Large amounts of leadership, management and employee time were being spent in appraisals and calibration sessions coming up with PDR scores that were used in pay and bonus awards, but with minimal differential and not appropriate for an environment where almost every activity is team-based and not individual - it was questionable whether this was time well spent and whether it motivated or actually demotivated employees.
Impact
- The People team left with a strong sense of purpose and agenda to get into the real detail of how to break the link with pay and bonus. They also gained insight into how to carry out better performance reviews that would motivate, not demotivate, and feel like people's time was well spent.
Context
The client is a multinational manufacturer in the defence industry.
The Problem
- The size and complexity of the organisation, notably in the way that pay review decisions were made in a matrix way, made pay review complex and challenging.
- The client lacked the resource to deliver annual pay review, both capacity and capability.
- Changes to the team in previous years meant a lack of corporate memory in the pay review processes.
Which meant:
- A large amount of time was being spent on processes without a clear benefit - and this was made more acute by the fact that the business was very busy and under pressure to deliver.
- A solution which was future-proof was required.
- External input was needed both in terms of expertise of the subject and to facilitate discussion around options.
The Tension
Reward needed a fair way to assign pay awards and bonus.
The wider People team had concerns about engagement and motivation both if PDRs were retained, and if they were not.
There were also concerns about how breaking the link between PDRs and reward would be received.
Leadership challenged whether the PDR process was a good use of their time.
What Reward Heads did
- As the Client sought external views and expertise on how PDRs are used, whether this is effective, and how else they could approach paying for performance in a fair and robust way, we pulled together a pre-read thought piece in advance of an HR conference. This allowed participants to consider the internal and external context and options and reflect on these with their local teams before the event.
- We ran a survey and facilitated a session with our wider forum groups on the topic to enable the key client contact to hear up to date views.
- We facilitated a series of workshops with a group of 20+ people around the purpose of performance management, the experience of it within the business, pros and cons of decoupling PDRs from reward, what the alternatives were. We then agreed next steps.
Business Impact
- A clear understanding of how to manage performance and whether current systems and processes were supporting that.
- Potential time saving and enabling effort to be directed into critical delivery.
People Impact
- A strong sense of purpose and agenda to get into the real detail of how to break the link with pay and bonus and how to carry out better performance reviews that would motivate, not demotivate, and feel like people's time was well spent.
Which resulted in …
After considering the risk and opportunities, there was overwhelming support for decoupling pay and reward from PDRs and the People team had collective confidence in the direction of travel and next steps.
If this feels familiar …
Many organisations are challenging the value of PDRs and especially how they interact with reward processes, whilst needing something fair and robust. At Reward Heads, we help organisations cut through complexity and make reward actually work.
