Waikato Business News November/December 2016

HR MANAGEMENT AND RECRUITMENT
WAIKATO BUSINESS NEWS November/December 2016 19
Variable pay:
a share of success
From page 18
Management becomes
more involved in safety.
The typical remark during
this stage is “We have rules
in place, employees should
just follow them!” Stage
two is therefore where one
would find most employers
in New Zealand as they
respond to the HSWA’s
implementation.
• As the company’s safety
culture becomes more
mature, the focus is on
“self”. Employees have
internalised safety values
which now also coincides
with personal values.
Individuals take responsibility
for their own safety.
They believe they can
make a difference to safety
through their own actions.
This reduces accidents further.
A typical remark during
this stage is “I have
done a proper risk assessment”.
• The mature safety culture
becomes more effective
when moving to the
fourth stage. During the
Interdependent stage, zero
harm becomes a reality in
the workplace. Teams of
employees take ownership
for safety, and responsibility
for themselves and
others. Low safety standards
and risk-taking behaviours
are not accepted.
Engagement is high and
safety becomes a source of
organisational pride. One
notices teams of employees
actively engaging with each
other, and even visitors on
site, about safety.
How can an organisation
develop a mature and effective
safety culture? The answer lies
in the development of effective
safety habits. Behaviour-based
safety focuses on identifying
the critical behaviours at all
levels of the organisation that
drive unsafe behaviour. It follows
a top down, bottom up
approach by actively engaging
management on one hand,
and employees on the other,
in identifying their own critical
behaviours. This process
builds a strong, collaborative
and mature safety culture that
has proven effective in massively
reducing injuries and
fatalities, if not eliminating
them altogether.
While New Zealand starts
taking the first steps towards
improving its safety culture
by complying with the
HSWA, it is worth keeping
in mind the ultimate dream
is to reach the reality of zero
harm. Behaviour-based safety
is the vehicle that will take us
to that reality. The headlines
may be a while away yet, but
that shouldn’t stop us from
dreaming!
Some leaders believe that
introducing an incentive
scheme will enhance
company performance but,
experience suggests that the
solution isn’t so clear-cut.
No guarantee
As remuneration and reward
specialists, we are often asked
by organisations to design
incentive schemes that will
remedy performance issues.
We advocate that carefully
designed and implemented variable
pay schemes can improve
workforce productivity. But, it
is important to understand that
incentive pay alone will not
guarantee business success or
drive all behavioural change
desired.
In fact, there are a number
of things variable pay does not
do. For example, don’t attempt
to introduce incentive pay as a
measure to shore up structural
deficiencies, poor morale or
bad client relationships as it is
unlikely to address the underlying
issues.
Rewarding good organisation
outcomes
Introducing variable pay
does not reduce fixed pay or
remove an organisation’s systems
around increases, rather it
gives employees the opportunity
to share in the organisation’s
success.
When exploring incentive
schemes our view is that
• Incentive pay is about
rewarding good organisation
outcomes with a financial
reward. Except in specialised
roles, it is not about
Cathy Hendry
Senior consultant
Strategic Pay
Tauranga
+ mob 027 498 9812
+ cathy@strategicpay.co.nz
motivation.
• With a deeply embedded
entitlement culture in New
Zealand, having a variable
component to pay adds a
refreshing reality check
as to how an organisation
works.
Good employers, particularly
those with good performance
management systems, will be
most capable of introducing
such systems of variable pay
and will be most likely to reap
the rewards.
Talk with us
Variable pay, if implemented
well, can be a useful tool to
reward performance particularly
in times of relatively low salary
movement. However, if you
are considering implementing a
scheme it is worth talking with
a remuneration specialist as
poorly designed schemes can
be problematic and will not
produce the desired outcomes.
Nigel Murphy, based at
Waikato Innovation Park in
Hamilton, and Cathy Hendry in
Tauranga are your local consultants
in Strategic Pay’s Northern
Region team. They are available
to discuss an incentive
scheme for your organisation
or review your existing scheme
to ensure that it is adding value
to your organisation.
Nigel Murphy
Consultant
Strategic Pay
Hamilton
+ mob 027 403 1242
+ nigel.murphy@
strategicpay.co.nz
www.strategicpay.co.nz
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