Balancing The Pay Equation

A central tenant of the conference will be to evaluate the relationship between employee performance, reward and long term organisation success. The conference will also include sessions on how to effectively manage reward and performance, simplifying reward strategies and aligning reward with engagement. One session, in particular, will tackle the issue of executive remuneration: how to engage ambitious, high-performing and talented employees by linking their performance to company objectives, vision and values.

Stephen Cahill, partner at Deloitte LLP, who will address the conference on executive remuneration, outlines how structures can be better aligned to longer term business performance. He will examine such issues as: the use of career shares; introducing longer retention periods for vested shares; clawback and malus arrangements; and using more strategic measures of performance when determining payouts to better reflect business performance.

Stephen Cahill, partner at Deloitte LLP, comments: “Much of the criticism of current structures is aimed at whether they are too focused on the short term, and whether they are truly aligned to performance. Annual bonuses, for example, in many cases appear to be more focused on paying for effort than performance. Remuneration must be structured to support not only the strategic and commercial values of the organisation but also the cultural values and this will vary considerably for each company. We do not necessarily think current pay models are broken but we do think that there are a number of areas where companies should be asking some tough questions.”

Charles Cotton, rewards adviser at the CIPD, comments: “When it comes to leadership development and sustainable value creation, employers should be asking themselves if their approach to reward is fit for purpose. The objectives of a good reward strategy have moved on from solely attracting and retaining valuable staff. Now is the time to connect total reward packages with the employer vision and enable employees to see what behaviours, values and performances the organisation is rewarding, how why and when.

“However, while executive pay is an important issue for employers, so too is how those in the rest of the organisation have their short- and long-term achievements rewarded and recognised. Given the ongoing turbulence caused by the current economic and business environment and the revolution in social media, HR professionals need to establish reward approaches that are not only resilient and agile but are also attractive and fair. In our centenary year, the CIPD will be championing good workplace and workforce reward practices.”