High-level executive reward schemes have the potential to be an incredible attraction and retention tool. They’re also critical in driving an organisation’s success.
However, this only works if senior people fully understand their reward package, and how their performance impacts that reward.
Having a brilliant, competitive executive reward offering is not enough. For your executive team to feel inspired and driven by your reward scheme, it must be communicated effectively too.
The value of executive reward
Executive rewards are like the “golden carrot” that keeps your people working to their full potential. At least, that’s the idea. A lot of the time, it doesn’t work out that way.
Instead, corporations invest huge amounts in schemes that fail to motivate or retain talent, simply because their teams don’t know what they’re being rewarded for. It’s common for executives to have little understanding of where their incentive is coming from, or the impact their work has on the final annual figure.
Reward has potential to be a huge enabler for performance, and this requires direct communication with executives about their unique value to your organisation. Money isn’t enough, especially when it’s coming from indeterminate sources – such as a yearly bonus with no personalised context.
Your teams need to understand the value of their payout based on their performance, how this impacts the growth of the organisation against its vision, and how their work has helped make this happen.
Challenges in communicating executive reward
It’s not uncommon for businesses to lose their top talent due to poor communication around employee benefits. We can look at one large corporation for an example of this. It was only when a senior leader was leaving the business that he discovered he had millions of Euros in a share plan that had been building for over 20 years. Because he didn’t know about this reward, he had no incentive to drive it further.
This is an extreme example, but a common theme. Executive reward packages are often complex, which makes communicating them in a way people really understand a challenge. We’ve seen many companies struggle because they’ve focused all their energy on reward strategy and design without giving their internal communications strategy the attention it needs.
The various elements that make up a total reward package are often communicated in silo. An executive may receive communication on payouts of last year’s annual incentive, which is handled separately to a pay review, which doesn’t tie into their long-term investment plan. Executive reward data is often held in different systems, and some will be outsourced to external providers, with a number of people responsible for the decisions that need to be made.
The ecosystem of reward is complicated. Add to this the fact your senior team members are often extremely busy, have a lot of responsibility, and have their own communication styles and expectations, and they can be forgiven for switching off to huge reams of data they don’t have the context to understand.
5 tips for effective executive reward communication
All of the above throws up some interesting communication challenges for organisations, and not addressing these challenges comes with risk. Ineffective reward communication can lead to disengagement and even the loss of senior team members.
It’s always better to tackle communication challenges head-on and, where needed, invest in expertise to overcome them effectively. Here are some ways you can effectively communicate executive reward to your teams.
1. Take a human-focused approach, every time
You may have the same reward package for all of your senior executives, but the way you communicate their total reward value should be tailored to individuals’ emotional needs and communication styles.
2. Have one-to-one conversations
Face to face communications work best with your senior leadership team. You might call this a “white-glove service” – a reward concierge that’s personalised and tailored to the individual. This is also your chance to talk to executives about things like investment opportunities and how to manage their money, as well as explain where the money is coming from and the impact they’re having on the organisation as a whole.
3. Link rewards to the values of the business
A truly exceptional reward strategy will align powerfully with both your company’s and employee’s values. Increasingly, more people are taking roles in organisations because they buy into their mission above all else. That’s why your values must come through in everything you do, including your executive reward communications.
Values are emotion-based, and personal to each individual. Find out what attracted your senior executives to your company in the first place, and what inspires them to keep showing up and working hard for your success.
Once you understand how their personal values align with those of your business, you can use this to communicate rewards in a more inspiring way, leading with the ‘why’ not the ‘what’.
4. Create an annual total reward statement that truly inspires
Create a comprehensive annual total reward statement to support executives’ understanding of their own reward, and use this as a tool to explain how your reward strategy supports the corporate strategy.
Don’t just send them a PDF full of numbers, this is an opportunity to get creative. Focus on creating something visual and engaging, with a user experience tailored to them. Not only will this inspire your senior people, it will show you understand them as individuals, and that they are genuinely valued.
You could also use technology to provide an interactive, immersive experience personalised to each user, with tailored content and featured tips on how to achieve and exceed their performance goals. Sage’s total reward app is an example of how a reward statement that engages and inspires can influence senior employee behaviours and boost performance in-line with long-term goals.
5. Reward shouldn’t be approached in silo
Reward communication should always be approached as part of a bigger picture, which incorporates your growth, people and reward strategies. After all, you need your top talent to grow your business, lead your teams and do amazing work, which in turn boosts your company’s growth, success, and reputation as an exceptional place to work.
Senior executives’ total reward packages can be a powerful driving force behind a company’s success – but only when communicated clearly, creatively and emotionally, linking each individual’s contribution to the ongoing growth of the business.
Looking for support with your reward communication? That’s what we’re here for.
Get in touch with us and let’s have a conversation.