What is the future of renumeration and leadership in a more empowered workplace? An expert weighs inSubmitted by Bronwyn
THE FUTURE OF REMUNERATION AND LEADERSHIP
The only constant is change
Chris Blair, Master Reward Specialist and CEO of 21st Century, a specialist Remuneration, Organisation Development and Change Consultancy, discusses new trends in remuneration and leadership – an ever-changing landscape in a more empowered workplace.
“Remuneration and management policies are evolving. Any remuneration committee that doesn’t pay attention may find their company at a loose end. Wage inequity is an ongoing debate in South Africa – and around the world – and the jury is still out about what constitutes a living wage.
“The wage inequity debate is multifaceted. There is both vertical and horizontal inequity that needs to be addressed; vertical meaning pay gaps from the top to the bottom of any organisation and horizontally being gender, race, culture, religion or performance-based, for example – anywhere that prejudice exists between employees and employers.
“Executive boards and remuneration committees are now faced with an environment where they need to mind their surroundings and be more accountable than they have ever been before. It isn’t all about the bottom line anymore. The modern executive is expected to be more ‘human’.
“In our current reality, directors are facing a more informed public. Both internally and externally, management teams are having to consider the consequences of their actions. From an external point of view, social justice and environmental concerns have taken centre stage (think Shell and its seismic blasting off the Wild Coast).
“Internally, broad-based talent retention, new working models and employee wellbeing are just a few of the factors in the ongoing juggling act. Beyond that, COVID-inflicted supply chain concerns, inflation and a plethora of socio-economic forces are at play. So, where does it all end and what exactly would a successful executive case study look like?
Out with the old…
“In the age of transparency and open communication, with the Companies Amendment Bill set to make executive pay gaps public knowledge, executive compensation structures are likely to be in for an overhaul. And over and above laying the wage gap bare, attracting and retaining the right CEO is going to require some creative thinking and flexibility.
“Revised pay models could take shape at various levels, not just executive. Many private equity pay models, for example, reflect lower cash compensation with higher long-term, equity-based compensation – like stock or profit share – and this has been shown to work in several instances.
The ESG conversation
“Environmental, social, and governance (ESG) awareness are more widespread than ever before. Executives should be closely examining the ESG factors that affect the organisation – both on the inside and out. Governance at board level and executive level, risk management, compliance, behaviours, ethics, values and culture are all in the spotlight.
“Greenhouse gas emissions are of great concern in South Africa– the 14th largest emitter of greenhouse gases in the world. As Europe and the United States move toward 2030’s climate goals, there is no time like the present to have robust discussions about sustainability measures that could affect the company's wellbeing and standing in the long term.
“Socially speaking, ‘CARE’ is the word of the day. Leadership must be more mindful than ever before of injuries, illnesses, exposure to harmful substances, workplace policies, gender balance, diversity and inclusion, employee engagement, employee voluntary turnover, training and development, behaviours, ethics, values and company culture.
Leading from the trenches
“The South African workforce is in a state of flux. Employers are no longer a law unto themselves. Far from it, openness, inclusion and flexibility foster loyalty, productivity and retention. Employment and pay are two-way negotiations and output is directly linked to a more satisfied, adequately compensated staff complement.
“The ‘Servant Leadership’ culture creates a meaningful connection that binds all levels of an organisation and breaks down silos. A Servant Leadership team observes, listens, validates opinions – even from those far subordinate in the hierarchical structure – and encourages a transparent culture characterised by trust and empathy. This approach fosters belonging, inclusion and ultimately better retention.
“We never know what the next crisis on the horizon may be. But companies that stand the test of time weather whatever storms erupt by being agile, open and showing empathy to every stakeholder in the company.
Quality leadership always wins
“Successful organisations are differentiated by successful people. Before any compensation practices can be addressed properly, leadership, board members, shareholders and stakeholders must share a common culture and the desire to do better for the greater good of the company. This logically leads to better performance across the board and greater rewards for everyone.”
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About 21st Century:
21st Century, a level 2 BBBEE company, is one of the largest Remuneration and HR consultancies in Africa, with a team of more than 60 skilled specialists, servicing over 1700 clients – including non-profit organisations, unlisted companies, government, parastatals and over two-thirds of the companies listed on the JSE. 21st Century offers bespoke business and strategy planning services, operating model and organisational design, creative reward practice modelling, change, stakeholder and culture management, training courses and comprehensive human capital and talent plans. These are all underpinned by our analytic and survey capability tailored to the African environment. 21st Century continues to offer solutions via a combination of virtual channels and on-site presence.
21st Century has expanded its services to offer a full turnkey sustainable business and remuneration service. Beyond remuneration and reward consulting, 21st Century offers local analytics for business advantage; remuneration and HR training; change management services; talent and people solutions; and end-to-end organisational design and development.
Issued By: The Lime Envelope
On Behalf Of: 21st Century
For Media Information: Bronwyn Levy
Telephone: 011 467 9233