Reward and recognition
Ian Hodson, Reward and benefits manager for the University of Lincoln, argues that the payroll function has an important role to play at the point of design of a reward scheme
D
uring the current economic downturn there is a need for sustaining organisational performance through the engagement and motivation of the workforce when perhaps the affordability of pay increases are not always sustainable. This can often result in an increased focus on performance and reward and it is often the payroll function that plays an important role in both the communication and payment of schemes linked to exceptional performance on a personal, team or organisational level. When outlining reward schemes it is often a direct link to remuneration that is seen as the outcome. However, it can be challenged as to how much of the incentivisation and engagement is lost through the application of the reward through the payroll. Terminology attached to processing payments such as the journey from the communicated input of gross pay to the output of net pay along with the line of ‘subject to statutory deductions’ often lead to creating disappointment or a loss of the motivational impact. Perhaps there is a necessity for the payroll department to be influential in respect of differentiating between remuneration and recognition. Accepting that with any form of payment there are more than likely to be implications for statutory deductions, therefore consideration should be given to the appropriate ‘payment’ method to arrive at the outcome that the scheme was designed to achieve ensuring that the last hurdle of making the award should not be the point where the impact is lost. Payroll
...“THANK YOU” IS TRULY WHAT INDIVIDUALS WILL REMEMBER FROM A RECOGNITION SCHEME AS IT IS TRANSPARENT AND TANGIBLE...
48 PayrollProfessional
can be influential in the design of these schemes in ensuring that the method of recognition maintains all aspects of compliance but is also relevant to the objectives of the scheme design. One such example is through using a third party to support the scheme who can ensure that the reward and recognition achieve the desired effect of acknowledging effort and increasing organisational engagement. An example of this is Aymtm Ltd who assist organisations to design and implement recognition platforms. Lyn Jarvis, of Aymtm, commented that “more and more we work closely with organisations to design schemes where the objective is to ensure a transparent reward process and platform that allows individuals to spend earned points at a variety of high street shops or online providers. We offer this through a web site where an organisation can brand the landing page and rewards to create a unique organisational experience and really create the connectivity between the employer and the employee through the recognition process. We work really closely with payroll departments to ensure that whilst this solution definitely ensures that the employees receive the desired motivational effect the background statutory compliance is still taking place. This may be through the use of PAYE settlement agreements or appropriate reporting.”
The ability to link reward to something
tangible is part of building the psychological contract with the employee that can often lead to increased future contribution and effort. Payment through the payroll as remuneration can often be inappropriate as the true benefit is lost amongst the payslip and array of payments and deductions that often take place. The supporting communication process can also only quote a gross payment as deductions are dependent on individual circumstances often resulting in disappointment or confusion when the net award is calculated.
So whilst any award that incentivises the workforce has a place in the modern workplace the role the payroll department can play in this is actually crucial to the design of the scheme. Often a move away from remuneration may be one that will increase the impact. The use of a branded web site or a branded voucher wallet that says “thank you” is truly what individuals will remember from a recognition scheme as it is transparent and tangible rather than an increase to their take home pay one month of x pounds and pence. Payroll colleagues need to ensure that they are involved in assessing options of making ‘payment’ at the point of scheme design to ensure that it does not fail at the last hurdle through identifying alternatives whilst retaining organisational compliance.
PP
HRfocus
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