How are the Best Companies delivering a ‘Fair Deal’ to their employees?


Fair deal

Fair Deal is one of eight criteria for organisations to ‘get right’ to feature in the Sunday Times/Best Companies Top 100.  So what have those who have won a coveted award been up to to make sure their employees feel they have a fair deal?  Is it really about offering the best pay? What benefits are these organisations offering? Are they doing things that engage people and don’t cost anything?  What are they doing that makes the difference?

They are getting the right balance between motivators and hygiene factors in their reward strategy.

Is it really about offering the best pay?  A number of the Best Companies have financial incentives in place to reward their employees.  None if these organisations have an explicit strategy of offering upper quartile pay in their sector.  However, a number report having offered organisation wide pay rises within the last year.  What they do offer is a range of financial incentives including:

  • employee share schemes.  At Abbott Risk, they believe that offering employees shares encourages better involvement and a sense of ownership.
  • bonus schemes. At Bard Pharmaceuticals, they offer an individual bonus and a separate company bonus at different times of the year.  Bard also provides total reward statements, pay benchmarking against other firms, and recognition awards.
  • employee managed bonus scheme.  At Capco, they are conducting a social experiment by empowering a group of employees to decide the performance criteria for allocating a portion of the company bonus pot.
  • team reward. At the Royal College of Nursing, staff members nominate each other for Team of the Year, with the winners receiving a financial reward (raised through sponsorship) at an annual Staff Awards for Excellence ceremony.
  • variable performance targets. At Stryker, the sales team can become members of the bronze, silver, gold or platinum clubs for hitting their sales targets and receive a financial reward.

What benefits are the Best Companies offering?  A range of benefits is used in addition to core salary, bonuses and reward.  These benefits include:

  • Flexible benefits.  Engine have introduced ‘My Benefits, My Choice’, a new benefits scheme which gives all employees the freedom and flexibility to pick the benefits that suit them and their lifestyle. These include childcare vouchers, flexible holidays and gym membership.
  • Wellbeing and gym programmes.  Adobe Systems partners with PruHealth to provide a wellbeing programme for employees. Adobe believes that this offers a good alternative to medical insurance which can be seen as a cost to employees who need to pay tax on this benefit.
  • Local office budget. At Bravissimo, each team has a local budget for social event, BBQs, drinks and ice creams.  Shops that achieve certain performance targets also get a tub of sweets and a thank you card.
  • Extra holiday days such as for people’s birthday at Lexington Catering or extra days off at Christams at Mill & Reeve.
  • Employee recognition schemes where people vote for each other and for teams.  For example, at Bravissimo, some teams hold award nights that they design and develop themselves to reward things like a ‘Tremendous Team Player’, ‘Initiating Ideas’ or ‘Going the Extra Mile’. At Hyman Robertson, the recogniton scheme is more simple – online nominations for individuals and teams to be recognised- these ‘winner’s then receive retail vouchers.

Nothing surprising you about what’s on these lists? Some organisations that are not being rated highly are surprised to see the lists above and feel they already offer something similar. If you are one of these organisations, you may well wonder how they’ve made it work so successfully.  What is clear is that these organisations don’t always use financial rewards – they don’t all have budgets that allow for bonuses.  What these organisations do differently is how they communicate and deliver recognition.

People in these organisations feel recognised by people they consider to be important to them – the CEO, their team, their customers.  Thank you cards, birthday cards and presents come with a personally hand written note from the CEO.  For example, the Chairman at Broadacres Housing delivers the recognition awards in person at the Staff Forum.  At Hawksmoor, they deliver various awards as a fun, informal process rather than at a more formal ceremony – as reflects their brand. At Lewis Silkin, they recognise the contributions of their secretarial team when working overtime – the IT and HR Directors make tea, serve lunch and host a drinks party afterwards.

What many of these organisations also do is focus on how they communicate the Fair element of Fair Deal.  Numerous Best Companies emphasise the fairness element through clear annual salary reviews, transparent job evaluation, clearly defined criteria for recognition, employee involvement in choosing colleagues.  As much reward and employee engagement research shows, people are more likely to be satisfied with their deal if they know that similarly performing colleagues are receiving a similar deal.  It is perceived unfairness, or lack of ‘distributive justice’ to use the psychological term, that is a major influence on creating disengagement.

What general principles can we take away?
Reward is a curious thing and is based on the balance of two factors –  hygiene and motivators.  ‘Hygiene factors’ are things like salary, working conditions and how company policies are applied by managers.  If organisations are meeting the expectations of employees around these hygiene factors then people feel satisfied, if not, people become actively dissatisfied about the contractual elements of the deal.   The influence of the motivators is quite different on workers.  Employers that offer ‘motivating factors’ – these can be recognition, responsibility, personal growth, and the nature of the work itself – find that they can significantly influence people’s engagement –  that is people’s emotional response such as pride, passion or energy.  Strangely, it is possible to have employees who are both dissatisfied with their pay yet have pride in the organisation.  Conversely, people may have the best pay yet somehow seem to lack that buzz.  What the Best Companies can be seen to be doing is getting the right balance between these two elements.

How balanced is the reward approach between these two elements in your organisation?  If you want to explore this more, try googling “Hertzberg hygiene factors”, “Meyer and Allen Distributive justice” or get in touch with us.