Three threats facing SA business and how to overcome them

Using a reward strategy to efficiently navigate the economic downturn
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Peet Kruger says reward management must link directly to the changing needs of employees as it affects their employment decisions and commitment.

The way people are rewarded for the work they do needs to change if business is to efficiently navigate the economic downturn. While it may be tempting for business to simply reduce financial reward in response to the economic downturn, a longer-term strategic view that blends financial and non-financial reward is advised.

“People are the biggest asset to any business,” says Peet Kruger, Exco member at the South African Reward Association (SARA). “Business therefore needs to keep in mind that the way they rewards their people has a direct effect on how their goals are achieved. Reward management must link directly to the changing needs of employees as it affects their employment decisions and commitment.”

Reward management takes into account more than just current basic pay; it also looks at what people need to be productive and positive in their work environment during and after the economic downturn. 

Kruger highlights three key areas where organisations should focus on building a reward strategy that rewards people in recognition of them being business’ greatest asset.

Keep employees involved through non-financial rewards
The economic downturn has seen many people remain in jobs purely for the salary, not because they are committed to or passionate about their work. Limited opportunities elsewhere mean that they stay and bide their time, instead of truly delivering on their potential.

“Great reward strategies blend financial and non-financial rewards that attract the right people and involve them in order to achieving the business’ goals,” advises Kruger. “I believe that the differentiating factor going forward will be how we combine the financial and non-financial rewards to create an attractive working environment for employees.”

One example of a non-financial reward could include working from home a couple of days a week, if the position doesn’t require face-to-face interaction with clients, or hands on operational duties on a daily basis. Accountants, writers, administration staff and even executives – these all positions where people could work just efficiently, if not more so, from home. Travel time and fuel cost are saved which in effect also leads to more money in the pocket.

Understand reasons for widening wage gap
“Unique threats faced by South African employers must be taken into account when developing reward strategies,” advises Kruger. “By knowing the threats, a business can address challenges impacting employee satisfaction and engagement in a number of ways.”

“One of the most dominant issues impacting on employee satisfaction is the wage gap,” says Kruger. “While management believes that people need to be rewarded for performance, unions want their members to make a living from salaries.”

This gap is widening as a result of lack of understanding of the emotional driving forces behind opposing views. Only once the focus shifts towards gaining a true understanding of the opposing view could strides be made towards a balanced resolution.

Business must be flexible and adaptable 
An excellent reward strategy is an art, not a science. Business has to be flexible and capable of adapting to changes in legislation, transparency or employee behaviour as there remains a growing disconnect between labour and management. 

Against the backdrop of governance, legislation, wage gaps and equality, organisations need to craft reward strategies that are built on their key objectives, understand the challenges unique to South Africa and will remain flexible and dynamic over the long term.

“None of these things can be resolved overnight as the issue of equal pay when legacy systems are in play means there is no short term fix. There must be a longer term view with long term strategies that address unavoidable issues,” says Kruger.

ENDS
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MEDIA CONTACT: Cathlen Fourie, 012 644 2833, cathlen@thatpoint.co.za, www.atthatpoint.co.za  

For more information on SARA please visit:
Website: www.sara.co.za  
Twitter: @SA_reward
LinkedIn: South African Reward Association
Facebook: SARA – South African Reward Association

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