Can you have recognition without reward?

I work for a 90,000+ employee global organisation which is considering introducing a global recognition scheme whereby employees who have gone "above and beyond" are thanked for their contribution but without any financial reward. This contrasts with our UK scheme whereby an employee who is recognised receives both an e-thank you card and a small award, usually between £20 and £100. This payment is made into an on-line account which they can use to purchase shopping vouchers or products from a catalogue.

I thank my team regularly either verbally or by email for their contribution but it does not have the same impact as turning up at their desk, publicly recognising them and presenting them with a small gift. I have experienced this myself when presented with a reward for the inconvenience to my family of being away from home over a series of weeks when I was presenting to groups of employees across the UK. My family have all enjoyed since the iPad that I purchased with that money.

I believe local, public recognition backed by a small financial reward is by far the most motivating experience. This is backed up by some research carried out by the Corporate Leadership Council which shows a greater return on investment in terms of employee engagement from a recognition arrangement than an annual bonus scheme.

If an employer were only to use a small proportion of their pay review budget to allocate to a recognition and reward program this can have a very positive impact on employee moral and engagement.
In the UK we use  0.1% of our annual pay budget in this way.

I will try to encourage my employer to introduce such a global recognition and reward initiative next year.

Are employee portals the future?

If you have not already seen the Corporate Platform Guide published last week by "The Platforum" in conjunction with Employee Benefits magazine then I would recommend a read. It is in my view a comprehensive and accurate summary of the current market landscape for employee platforms. These are propositions new to the market where employees can access group  financial products, such as GPP and ISA, and financial information and guidance. A link to the publication is below:



http://www.theplatforum.com/files/Corporate_Platform_Guide.pdf

This guide contains my own interview on the experience of CSC, who were the first employer to offer the Scottish Widows "mymoneyworks" portal to our staff. But a year on how successful has this new proposition been and is there any possibility of it being the future delivery mechanism for pension provision in the UK?

The interest from CSC employees to date has still been centered around the GPP offering and the pension planning tool contained within the portal. We have had little take up on the cash ISA and internet savings account which we launched a year ago (a take up of approximately 80 employees out of a workforce of 7,000) and we will not know until the new year how many employees decide to pay into the equity funds ISA which we will start to offer from January 2012.

Bearing in mind it is easy for an employer to set up a GPP for its staff and the ISA industry is generally well understood and easy to access for individuals, why would an employer be considering offering such a platform? From an HR perspective this has, in my view, to do with your employer brand and overall benefits offering.

A company's EVP (employee value proposition) should take account of different employee segments (both from a generational and affordability viewpoint) and the varying needs in relation to benefits provision this brings. If trying to attract the best graduates in the industry will they be more interested in the company's pension provision or how they can affford to pay off their student debt in the first few years of employment? With auto-enrolment coming over the horizon will graduates see the benefit to them of the company's standard pension funding? Would it be better to provide a lower level of pension funding to start building up a retirement pot and a contribution into a shorter- term savings vehicle which can be accessed when they need it rather than being locked away until retirment?  This is all about ROI on your company's benefit spend. What will make your employees best appreciate the benefits package on offer.

However, a total flexible approach whereby each employee can decide how the company's funding is allocated to best suit their needs, has to be backed up by comprehensive financial information and guidance so that employees fully understand the impacts of their choices both in the short and long term. This is where the educational part of the employee portal with easy to read guides, interactive tools and case studies ("people like you ....") adds the real value. This enables the employer to offer cost-effective, tailored guidance to its workforce via technology, with additional face to face advice being concentrated towards those who have more complex decisions to make.

It is the continual investment in technology from the providers who are offering these platforms which will influence whether they become the future, or a fad of the time!

The picture is of myself with "mymo" the character embedded into the look and feel of the portal at our launch in 2010.

Auto-enrolment U-turn impacts even the biggest employers

When Steve Webb first announced on Monday that employers with less than 50 staff would not need to comply with auto-enrolment until after May 2015, I did not take much notice working for an employer with more than 7,000 employees in the UK. However, when the DWP subsequently announced it would postpone the increase in employer contributions from 1% to 2% from the current date of October 2016 to some future date, not being announced until January, then I started to read with more interest. These changes mean that even the biggest UK employers will be unclear about their obligations until the new year.

For those employers like CSC who have been working on their strategy for auto-enrolment for some months this delay and lack of clarity is not at all helpful. I am sure that those employers who need to comply with the requirements from 2012, or those choosing to comply early next year, will need to have embedded any increase in their pension costs into their financial plans and budgets already. These financials are likely to include a prediction of pension costs into the future as pensions are a long term investment for an employer, and not just for 2012 alone. Many employers will I expect be automatically enroling their current non-joiners at their standard rates of pension contributions: but what about those employees who cannot afford to pay the matching arrangements in your scheme (and that is why they opted out in the first place).

Some employers may be considering introducing a "minimum compliant" strategy for those employees who have not joined their employer's pension arrangements due to affordability. Standard Life are even suggesting that a "nudging" strategy whereby contributions start at a low rate and then increase each year as the auto-enrolment requirements increase could be more of an affordable option for many who are not currently saving for their retirement. This is where the recent U-turn from the Government can delay the finalising of any strategy decisions that need to be made until after the new year. For some this uncertainty, which may appear small to the Government, could have a real business impact.

Julie Parker-Welch, the pensions strategy manager at M&S, has gone on record this week declaring that administering auto-enrolment is "an absolute nightmare", trying to figure out who in their workforce to auto-enrol and how to communicate with them.

It is not at all helpful to those larger employers who need to be making decisions on their pensions strategy from October 2012 (less than a year away) for the Government to be changing the goal posts at this time.

Whilst on the topic of auto-enrolment the biggest uncertainty we have as an employer at CSC, whose workforce needs to be globally mobile to meet the needs of our clients, is the definition of who to enrol - similar to M&S but for different reasons. Why would it be at all benefitcial for a US employee who has been contributing to his 401k plan throughout his career to be enrolled into a UK pension scheme for the 6 month period he is working on a project in the UK?  Again more clarification (or amendment) required and we will be speaking to the Pensions Regulator and others on this issue in the new year.

We await clarification in January with interest!