Welcome to EvDav Consulting’s Research Section. This is the seminal section of the website which gives me an opportunity to share my research and that of other thinkers in order to generate debate on key issues of a reward nature, which are faced by HR & Reward Managers today. Please note that these articles are a distillation of research articles, good practice and my own thoughts, which can never hope to reflect the mass of literature in this complex and dynamic market.

If you wish to provide any constructive feedback on the following articles or would like to be on my electronic mailing list for future articles, just go to the Contact page and leave me your details for future reference.

I would also recommend that you click onto the ‘Reward Economy Pulse’ page, which gives a weekly update of selected news, opinion and research relating to total reward issues affected by the economic downturn.

 

Engaging Staff in an Economic Downturn – December 2008

It is hard to escape the media headlines on the current economic downturn and the impact this has on consumer spending and employment. With less money and greater budget uncertainty, employers find it harder to achieve financial returns in line with shareholder expectations. What impact does this have on your reward package? And what role does reward play in engaging your employees during these difficult times?

The attached presentation was delivered jointly by Sylvia Doyle (Reward First People Consulting) and I at a Swindon and North Wiltshire CIPD event We explored ways of thinking beyond cash and exploring the world of total reward, using marketing techniques such as employee segmentation to differentiate a business from the competition.

Please click here to read the presentation.

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The Coming of the Consumer Age – Employee Segmentation – October 2008

How often have you read articles and newsletters over the past couple of years extolling the virtues of employee segmentation in order to optimize a reward package? As sure as eggs, you can find lots of advice about how one should use different media and messages tailored to the needs of each segment. The one thing that constantly stands out for me is that employees are increasingly been seen as “customers” within an organization.

Having established that, it is therefore quite disappointing that many organizations still fail to understand the fundamental needs, desires and motivations of their internal “customers”, to the extent that barely one fifth fully value their reward package. As the economy edges towards recession, HR and Reward Managers are coming under increasing pressure to optimize the reward mix within challenging financial targets. Against that backdrop, there is not a better time to find out the DNA of your internal customer base by applying some of the more rigorous processes that have been used successfully in consumer marketing for many years. Failing to draw that connection could be terminal for some reward programs!

The attached article was written for my eminent colleague, Sylvia Doyle, which has been published in the October issue of her Just Rewards Newsletter http://www.reward-first.com/downloads/newsletter.htm. For further reading on the use of bespoke tools and techniques to help HR think differently about marketing, I would recommend a book by Caroline Welsing-Boogard entitled ‘HRMarketing – A New Perspective on Human Resources Management’.

Please click here to read the article.

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Evaluating the ROI of Reward – June 2008

This is an updated version of the systems approach to optimising reward article, which I released below in October 2006. It was a joint presentation made by Dr Jeremy Griffiths of Maritz Research and myself at the e-reward Conference, held in London on 4th June.

In the current economic climate, expenditure on people costs has come under intense scrutiny. The issue is when does a cost become an investment and how do you calculate the payback or return. Paradoxically, research undertaken by Thomson online benefits and other bodies show that very few organisations know how much they spend on their people, let alone what the payback is.

The presentation suggests how to adopt a more holistic approach to evaluating reward, using qualitative and quantitative tools to calculate the ROI. The consensus from the workshop was that any form of systemised measurement to demonstrate value is preferable to the ad hoc methods currently used.

Please click here to read the article.

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Make a Sacrifice to Gain – February 2008

The forthcoming changes to tax and NIC rates for 2008/09 are very much ticking time bombs, the implications of which have yet to be fully grasped by many employers. When Gordon Brown sat down from a grandstand finish to his final Budget speech last March, his headline announcement was about a reduction in the basic rate of tax from 22% to 20%. What he made less obvious was the discreet removal of the 10p starting rate for income tax and the increase in the National Insurance upper earnings limit by £3,900 on top of the normal inflation-linked rise.

These changes will have an adverse effect on employees earning less than £15,000 who could in effect suffer from as much as a 2% cut in their take home pay, due to a greater liability to tax and NIC. Conversely, higher paid workers whose earnings are £41,500 or more will find themselves marginally in pocket.

Against that background there has never been a better time to turn tax losers into gainers through salary sacrifice arrangements. Whilst there is still some uneasiness about HMRC’s explicit threats to close down tax avoidance schemes, it is genuinely believed within the benefits industry that salary sacrifice schemes are relatively safe until at least 2012 when pensions’ auto-enrolment are introduced. In particular, tax and NIC free schemes that support Government priorities, such as childcare and “green” initiatives, should survive for the foreseeable future.

The attached article was written for the Forum for Private Business (FPB) who represents 25,000 UK-based private businesses, employing more than 600,000 people. The FPB has been particularly scathing about the effect of the new tax rates on SME’s and the article, therefore, is intended to show smaller companies that salary sacrifice is an effective way of reducing the tax burden.

Please click here to read the article.

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The Changing Reward Scene in Local Government – January 2008

Public Sector pay is back in the headlines once again as the government moves urgently to open talks on three-year pay deals. Whilst initial focus will be on teachers, nurses and the police, the Comprehensive Spending Review for 2007-11 places a duty on local authorities to maintain pay awards within inflationary levels, currently predicted to be 2% by the end of 2008.

Against that background, there is a widespread view in Local Government that the current national pay agreements do not provide a flexible innovative framework to reflect the changing nature of employment in the Local Government sector (LGA Executive – 15 March 2007). This is an astonishing state of affairs where over £59.94bn of tax payers’ money was spent on local government employees’ pay and benefits in 2006/07, equivalent to nearly £1,000 per head of population.

Nevertheless, local government is committed to developing new pay and rewards strategies over the medium to long term based on clear principles of collectivism, affordability, flexibility, equality and productivity. Central to this strategy will be encapsulation of a total rewards approach in order to promote the overall value of the Local Government employment package. All of these changes should be at the heart of local authority corporate plans in the future.

The attached article touches on the key challenges and developments currently facing Local Government. It is extracted from a pay research project report which I recently produced for a prominent local authority.

Please click here to read the article.

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Using Flexible Benefits to increase the ROI through Effective Performance Management – January 2008

To the casual observer, no one would put flexible benefits and performance management in the same boat. After all, flexible benefits merely fulfil a hygiene factor whereas performance management is a tenuous state of affairs that is sensitive to much greater influences. But there is a growing body of research emerging, which shows that flexible benefits and performance management can form an unlikely alliance, with positive spin-offs to an organisation and its people.

I was privileged to chair a session on this very topic at the Professional Pensions Show last November where Jon Bryant, Head of Flexible Benefits at Jardine Lloyd Thompson, gave a very interesting presentation. We subsequently wrote a joint article for the Show’s supplement, which was released with the January edition of Professional Pensions magazine.

Please click here to read the article.

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Optimising Reward – A Systems Approach – October 2006

It’s every Reward practitioner’s pipe-dream to measure, assess or predict what employees want in their package and, at the same time, achieve an optimal Return on Investment (ROI). Since no employer knows how to achieve this in practice, no competitive advantage can be truly achieved. But times are changing. Human capital practitioners and marketing researchers are forming an unlikely partnership and asking critical questions such as, “What are we actually spending on employee reward and what is it buying us (value)?

I undertook a fascinating piece of research with my former colleagues at Nationwide Building Society in 2006 in the form of a conjoint analysis. This technique is one that is well known to marketing professionals who use it to find out which attributes or products prospective purchases really want. The technique has been used before in connection with reward, but to date there are limited examples of organisations using this method to understand their employees’ preferences, and thereby influence the redesign of the package.

Nationwide worked with specialist consultants Maritz Research to design an internal survey that looked at many aspects of the Society’s benefit proposition, both existing and future. Qualitative and quantitative research was undertaken with a representative sample of employees in the form of focus groups and an online survey. Some of the findings were very surprising in terms of what employees valued. Also, the research revealed 5 significant employee segments, which were to a large extent influenced by age, gender, length of service and levels of commitment. Responses were statistically weighted to ensure that a level playing field was established in terms of “value” and “importance” to each employee.

The conjoint analysis findings were then triangulated against the utility or take up and cost/savings of each attribute to arrive at a ROI factor on a scale of 1 to 10. For instance, the seasonal (Christmas) Recognition award had a high ROI factor of 8 due to the high value attributed to it by every employee segment, plus its high take up and low cost. In other words, it was calculated to be a low cost/high value benefit – the optimal mix!

The next stage of the research was to build a simulator that could replicate various scenarios in order to predict the optimum benefits package for one or all of the employee segments. The outcome of this systems approach should be for important strategic decisions to be made about the future structure and design of reward packages with much more confidence and with less risk.

This systematic approach to reward design has already captured the interest of several other major employers and in particular the human capital purists. As aptly put by Haig R. Nalbantian et al in 2004 (Soundview Executive Book Summaries ©) – “Play to your Strengths” – but do employers really know what their strengths or indeed their weaknesses are in relation to reward and benefits design?

Please click here to read a presentation which I delivered to the CIPD Special Interest Group (SIG) on this subject.

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The Business Case for Recognition Schemes – August 2006

Recognition is widely regarded by many commentators as one of the key drivers for enhancing the psychological contract, and all the research shows that it genuinely leads to improved commitment and organisational performance. It is one of the few rewards that acts as a lubricant for the hygiene and intrinsic factors of an employment proposition. But to be effective, Recognition needs to form part of a wider strategy so that it becomes embedded into the values and modus operandi of an organisation.

I undertook a piece of research for Charles C. Mina (a leading international Recognition provider) in 2006, which outlines the business case for Recognition Schemes. I produced an article which was not only a synthesis of research material but a case study of an effective Recognition Scheme delivered by a leading Building Society. In particular, the case study shows how a compelling business case can be developed for a Recognition Scheme by aligning its key outputs against business and HR metrics.

Please click here to read the article.

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Pay – Defining and Constructing the Right Approach

What constitutes pay? This is a hoary subject to understand when there are so many variations of pay nowadays. However, what I’ve tried to do in this short research article is to identify the two main groups of pay and then apply some sound guiding principles for developing pay structures. I’ve then touched briefly on some research which shows that there is evidence of a growing body of pay reform, particularly in the public and not-for-profit sectors. Finally, I’ve given a case study of a leading professional Institute which has bitten the bullet and introduced a new performance related pay management process.

Please click here to read the article on this subject.