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Hybrid work is here to stay, so what should we do about compensation plans? Do performance and rewards structures need to change? Is this a problem or an opportunity?

As companies consider how to reset after the biggest disruption in recent history, HR Comp & Ben teams are looking for the best strategies to attract talent, support and motivate employees, and get performance and productivity back on track.

Here’s what some thought leaders are saying about the way forward.

A unique opportunity

First some good news: we are at an inflection point that presents upside opportunities for businesses that take advantage of the shifting work environment. In a recent white paper, Hybrid Work: A Guide for Business Leaders, Microsoft lays out the strategies they have learned around “People, Places, and Processes” as they transitioned to hybrid work, in order to help other organizations make the same shift.

“There’s no going back to the pre-pandemic world,” says Jared Spataro, Corporate Vice President of Microsoft 365. “Whether we like it or not, hybrid is going to rewire the operating models of most businesses over the next 12 months. The question is simply, will we just let that play out or will we take an active role in shaping the future?”

“The shift to hybrid work is a strategic business opportunity for every organization,” concludes the Microsoft Hybrid Work Guide, “one that requires a new operating model” to gain competitive advantage and address the urgent opportunity.

Reward performance, not face time

Remote workers have long held that they should be judged on their results, period. And while most companies would say they reward employees based on performance, there is still the perception of favoritism for that employee who is seen staying late at the office every night, showing dedication that is worthy of reward and promotion. 

This has to change if hybrid work is to succeed, according to the Human Resources Hybrid Quick Start Guide, produced by Microsoft as an accompaniment to their Hybrid Work Guide. Companies should “Challenge leaders to shift performance assessment to outcomes-oriented metrics.”

Perhaps it’s natural for there to be a bias in favor of what (or whom) you can see over what you can’t, but that exposes the real problem: often companies haven’t put in the effort to develop an objective way to see who is performing and who is not because, let’s face it, it takes a lot of careful thought to design measurable performance objectives. But that effort can pay off, not only because it enables a hybrid work model, but because, based on Microsoft’s experience, “evaluating based on outcomes allows employees to have greater flexibility in how those outcomes are achieved.”

Digitize compensation management

The Microsoft Hybrid Work Guide emphasizes the renewed importance of digital transformation. Two pieces of advice from the guide: “Move everything to the cloud—as quickly as you can,” and “Digitize every business process—from operations to sales.”

Another key action for HR recommended by Microsoft is to “Communicate proactively and provide transparency on leadership’s decision-making processes.” This is a native benefit of digitization. A system where everything is done online in a centralized and transparent manner—for example, review and approval of a raise or bonus—enables easy communication and engenders greater employee trust.  

Adapting to a shifting workforce

A hybrid work model that allows remote work opens up the possibility of a geographically dispersed workforce. And employees that are working from home have different life challenges and needs than those coming to an office, suggesting that a different range of benefits and perks might be more meaningful. Watch for our next blog, Pay Scales and Perks in the Hybrid Workplace, where we address those key topics.

Finding the right solution

To accomplish the goals needed to support hybrid work, like tailoring benefits to meet the needs of different employee populations, pegging compensation to measurable performance, and digitizing compensation processes, companies require highly capable technology for managing total rewards. 

beqom provides the total rewards management platform for many of the world’s largest enterprises, including PepsiCo, DHL, BNP Paribas, and Adecco. Companies who are evaluating their current compensation management approach can use beqom’s free online Rewards Maturity Assessment tool to determine where their rewards maturity level falls, from Below Standard to Mature.

Rewards Maturity Assessment