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Why Should Performance and Compensation Matter to Large Enterprises?

The quest for a great employee experience is centered around a business need for long-term engagement, retention, and productivity. But how can you deliver an engaging experience that not only produces results but also motivates the workforce?

According to Aon Hewitt’s 2018 Global Employee Engagement Study, the top opportunity for driving employee engagement for the second year in a row is reward.

“Conventional wisdom suggests that engagement has a lot to do with one’s manager and that pay is a hygiene factor not terribly important to one’s engagement. Our findings fly in the face of this”

– Aon Hewitt

The study covers 1000 organizations and over 5 million employees, revealing that rewards and recognition continue to be the strongest drivers of engagement globally—after climbing up from position three in 2016. 


Top engagement opportunities in 2018:

1. Rewards and Recognition

2. Senior Leadership

3. Career Opportunities

4. Employee Value Proposition

5. Enabling Infrastructure

Driving engagement through pay

While a good salary is necessary to attract and retain employees, it’s not about how much you are paid that drives engagement, but rather believing that you are paid fairly that is top of mind for many employees.

Pay fairness is an essential element of an effective compensation program and an integral part of the employee experience. As regulatory and legislative requirements increase across the US and Europe, this is a topic that will continue to be a challenge for large organizations as they look to address these issues and establish a foundation of trust with their employees.

Strategizing compensation management is one of the strongest investments business leaders can make to improve the perception of fair pay through trust. In doing so, companies can make informed and consistent pay decisions, showing employees how their pay is managed—giving them a deeper understanding of their purpose within their organization.

You can’t underestimate this sense of purpose. Understanding your value installs a level of commitment, pride, and loyalty, offering a level of engagement that has the power to buffer the impact of adverse environmental factors—especially when it is not economically viable to make sweeping pay and bonus increases.

Communicating compensation

Understanding the corporate vision and how their contributions fit within the organization goes a long way towards fueling the employee experience. Gaining employee buy-in is the vital next step of a successful compensation strategy. If it’s not communicated accurately, honestly, and often, it may fall short.

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A recent Ventana Research report showed that 83 percent of employees see compensation communications as either very important (46 percent) or important (38 percent), yet 52 percent experience communication issues through the use of inadequate technologies.

Complex pay decisions become challenging when relying on outdated systems. Moving away from spreadsheet-based processes, and having access to the right decision-making tools that promote engagement and recognition is becoming essential to organizations who want their compensation initiatives to ensure fair pay.


Some of the features a dedicated compensation solution can provide include:

  • A transparent and aligned 360º performance process integrated into your pay and rewards structure.
  • A consistent and fair evaluation process, excluding the possibility of manager bias.
  • Measurable evaluation criteria with clear communication.
  • A continuous feedback culture from peers and managers.
  • An objective recalibration process aligned with merit increase guidelines.
  • A  compliant platform to meet pay fairness legislation. 

 As mentioned earlier, the quest for a great employee experience is centered around a set of business needs. Recruiting and retention costs continue to rise and this accentuates the need for employers to do all they can to attract, engage, and retain high performing individuals. An investment in aligning your company values with a transparent performance and compensation management solution not only drives company performance—it promotes the happiness of your people. 





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