BT advises board buy-in for revamping rewards

HR departments planning to overhaul their reward strategy must ensure they have senior management buy-in and prove the links to business success, a senior HR practitioner has advised.

BT’s HR director for reward, Kevin Brady, has made huge changes to the firm’s reward practices over the past two years, affecting about 38,000 staff.

He said the main drivers for the overhaul was a change in senior management, with its then new chief executive Ben Verwaayen leading the project, and having a clear direction.

“We have a written strategy which provides greater clarity and transparency and provides a new linkage to business performance and level of individual reward,” he told the CIPD reward conference last week.

Communicating benefits to employees is also vital, Brady said. BT employees thought benefits made up between 8% and 10% of their total reward package. In fact, the benefits amount to 38% of total labour costs.

The next planks in BT’s strategy is the alignment of bonus and benefit levels by role, and the launch of its flexible benefits, called Choices, in July.

Brady advises a seven-point plan for overhauling rewards:

– Get business sponsorship and ownership

– Do not underestimate resistance

– Understand internal dependencies on your structure

– Remember that project management skills are crucial

– Cost can restrict the speed of change

– Total reward statements are not enough

– Keep engaging with staff.

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