By Lisa Aggarwal
Every day, I’m amazed by the innovation I have seen since the Covid-19 pandemic began. In order to survive, virtually every company has been asked to evolve and change the trajectory of its business. Every person has made changes to their routine and how they operate on a daily basis.
For those companies whose fiscal calendar begins on January 1, the traditional annual merit cycle is upon them. The good news: organizations who are managing to thrive despite a worldwide pandemic (i.e., not the restaurant and hospitality industries) are still planning on giving their employees raises.
Yet, the annual merit increase isn’t as “traditional” as you might think. Some of you might remember the days when you received a raise on the anniversary of your hire date. One of my colleagues recounts when moving to a yearly increase was unheard of, needing at least a year of change management for employees to understand why it would be any other way—or why it even happened this way in the first place.
As CHRC has been researching how companies are coping with this year’s cycle, the overwhelming answer is: it depends. According to a recent study by the Economic Research Institute, annual salary budgets remain around 3.0%, but many companies are only implementing actual increases around 2.2%. Some of that gap may be avoided by thinking strategically. Here are some questions to consider:
- Do you need to work on an annual review cycle, or should salary reviews only be done if revenue targets are met? Can that be quarterly, or can you wait until business recovers?
- Should you focus on promotions or retaining your high performers who, according to many reports, are still able to find new jobs with relative ease?
- Are your compensation programs and structures aligned with the external marketplace? Have any of your roles been affected by increases in your state or city minimum wage as of January 1? With remote working, do you now compete nationally for talent?
- What programs is your company implementing to address burnout and the around the clock work from home cycle? A recent study by AON indicated that the #1 concern when it comes to retaining female employees is not only childcare…it’s wellbeing. That concern doesn’t stop at the gender line. Do you need to think beyond Total Rewards to Total Wellbeing?
The more creative you are with how your financial resources are invested, the better you will be able to redeploy your assets. Are your merit increase cycles ready for a little innovation, or are they carved in stone?
Our last blog shared insights on what activities will drive the workplace of the future. That concept of a workplace poses a huge challenge for many managers out there.
A recent podcast by GBH’s Innovation Lab addressed what organizations must build as they are dismantling cube space: management skills, competency assessments, and performance reviews to match the new workplace. Leaders having trouble coping with remote working will benefit from this program’s insights offered by experts, Professor Nicholas Bloom of Stanford and Liz Fosslein, head of content at Humu. Each organization will need to study and then tailor a return to work hybrid model that fits their organization.
Quite often when we start work on a compensation project, one of the first questions we ask is the state of the performance management program. Too often we get guilty looks followed by hemming and hawing. As Covid-19 began to shut down the world, CHRC probably had a better understanding than most as to why the majority of managers in the US would be very uncomfortable with a remote workplace. The reason many leaders fall back on MBWA (management by walking around) is either because their organization does not have a robust performance management system and/or they have never been trained to manage in the first place.
At the end of the day, remote work is here to stay, and even when it is safe enough to return to large office buildings, hybrid remote and in-office work policies must be developed thoughtfully, in conjunction with robust performance management systems, versus being allowed to regress back to the routines of the MBWA practitioners. For those who thrive working remotely, if the majority of their coworkers return to the office, it could be detrimental to their career and could have a disparate impact on certain groups of employees who gravitate towards working from home. Professor Bloom is emphatic that organizations be prescriptive about “days the senior management are at home,” to ensure that people can be in the office to truly collaborate and innovate, not merely to posture and curry favor with the boss, and “to prevent a promotional advantage and stress everyone out.”
This past year has turned our idea of the workplace inside out, upside down, and cattywampus. While many look at this year as productivity lost or teamwork put on pause, there’s also much to be gained from rethinking the idea of the workplace. Are people really most productive while sitting in their cubicle all day—sans distractions? Distractions happen wherever you are. Distractions used to be colleagues talking about fantasy football picks, latest cat photos, or extended group lunches. Now distractions are crying babies, Instacart deliveries, or unstable Zoom connections. There is no evidence that productivity suffers if not in the office.
Workplace should mean just that, the place in which you do your work. It shouldn’t matter if it’s a cubicle, your kid’s room that has the best Wi-Fi, a Starbucks patio, or on a conference call in line for a COVID-19 test. The pandemic has forced most of us to figure out where we get our BEST work done.
As this fantastic article mentions, organizations must shift from “who” should be in an office to “what” should happen in a shared space. Client phone calls, creative brainstorming, cold calling, brief writing, Excel spreadsheeting—as we reimagine what the workplace is, let’s focus more on the quality of work and less on where the work is being done. Technology has allowed us to rewrite the entire premise of the office. As we move into a new year—and a continuously morphing workplace—management skills, competency assessments, and performance reviews must evolve to match.