You’ve heard of the new normal, perhaps ad nauseum, but even long before Covid-19 the concepts of “new work” or “the future of work” were much discussed in HR circles around the globe.
A German philosopher is credited with starting the discussion around New Work, and now a collective of organizational thinkers in Germany is moving the discussion onwards to New Pay, examining and challenging our modern notions of rewards.
The "New Work" philosophy
It’s fair to trace the term “New Work” to the German philosopher Frithjof Bergmann who was the founder of the New Work movement. Bergmann (1930-2021) believed that our old model of work, born of the industrial revolution, no longer served humanity well in the global and digital age.
Bergmann taught at the University of Michigan on the outskirts of Detroit, and so had a ringside seat to the ups and downs of American auto workers, who labored within the classic model of an industrial job. Autoworkers are famously subject to the whims of capitalism and the market, where the only reward—other than perhaps pride of workmanship—is a paycheck, and fulfillment is something to be found outside of work.
Bergmann held that freedom means having the option to do what is important to you. The central tenets of New Work are autonomy, freedom, and participation in the community. New Work should emerge from and provide creativity and self-fulfillment, or in other words, should embody the pursuit of happiness. The Great Resignation has been interpreted as a sign that workers indeed are searching for a new model of work.
Who’s thinking about “New Pay”?
So if work is changing, then surely rewards must change too, right? Definitely yes, and it is perhaps fitting that a group called the New Pay Collective has arisen from German roots to explore the possibilities for new reward models.
The New Pay Collective calls itself “a new type of network that supports people and organizations in the reflection and development of remuneration systems.” The group is on a mission to determine what reward models should look like in the new world of work. They aim to question existing beliefs and assumptions about pay and find new possibilities that align with a world that values not only hard work and achievement but also fairness, diversity, well-being, and meaning—among other things.
To that end, the collective has published a research report, prepared in cooperation with master's degree candidates at the University of Pforzheim (Germany), that analyzed the interdependence between New Work and New Pay. The New Pay Report 21/22 (German version here) subtitles itself as “A qualitative and quantitative study of the relationship between corporate culture and rewards.”
Why is having a new pay model important? “A compensation system that fits the corporate culture,” says the report, “has a positive impact on value creation, innovation, and employer-branding.”
Assessing cultural maturity
The New Pay report classifies companies according to their cultural maturity and (very non-judgmentally) assigns a color to the different levels, with most companies falling into the Orange or Green categories. The Orange maturity level includes more traditional corporate cultures “characterized by formal hierarchies and values such as efficiency, effectiveness, and striving for success and status.” Managers are in control and “tasks are often more important than relationships and the drive for achievement encourages competition.”
The Green maturity level is more aligned with the New Work philosophy. “Green organizations can be described as a form of social network focusing on collaboration, community, and trust. Decisions are made by employees as a team, taking into account diverse perspectives and individual needs. Organizations are aligned around shared values, striving for meaningfulness and sustainability.”
Aligning New Pay to New Work
So what does this mean in terms of the remuneration model? First consider that, according to the report, New Pay is based on the principles of “Fairness, Transparency, Self-responsibility, Participation, Flexibility, We-thinking and Permanent Beta”. The report delves into each one in more detail than we can here, and is worth reading to get a fuller understanding, but the chart below helps explain them by showing how these New Pay characteristics contrast with a more traditional pay model.
Not all companies are fully “New Work” companies, but even “Old Work” companies can benefit from a degree of New Pay thinking. By considering how to reward the behaviors that support a flexible, adaptive, digital-age, global organization, companies can better prepare themselves to compete, thrive, and realize the positive impacts on value creation, innovation, and employer-branding, as well as on recruitment, engagement, and retention.
Making New Pay a reality
Any compensation strategy is only as effective as the systems used to deliver it. Implementing a New Pay model requires capable and adaptive compensation technology, able to accommodate its precepts: flexibility, transparency, participation, fairness, adaptability, and more.
When a compensation philosophy seeks to make people happy, there can be only one compensation management technology solution that can deliver that vision. It’s our tagline, after all. Check out our infographic on the ROI of a Digital HR Transformation to see how you could benefit from a dedicated compensation management solution like beqom.