CIPD responds to Budget: 'Where was the Chancellor's commitment to productivity?'

 

Commenting on the Chancellor’s Budget, Mark Beatson, chief economist for the CIPD, the professional body for HR and people development, said:

“The Government is right to cheer the rise in employment, but there are still some big questions that they have failed to answer on productivity. It’s astonishing that productivity wasn’t referenced even once in the Chancellor’s speech, and yet this is the biggest challenge that the economy and businesses face now. We need to understand how we can make more of our people, our assets and our infrastructure in order to boost business performance.  We saw announcements in the Budget designed to encourage investment, but we saw little which will make a real difference to how UK employers develop workforce skills or use existing workforce skills effectively. There still isn’t a clear, coherent plan for productivity and, once again, skills are falling through the cracks. Unless we address the UK’s skills challenges, any short-term gains in the economy will be dashed by productivity shortfalls in the long-term.

“The increases to the national minimum wage and personal tax allowance threshold that we have seen this week are welcome, and we would like to see further increases in both during the next Parliament.  However, if we are to ensure that incentives to work are optimised, the Government really needs to think about these alongside what it does about National Insurance contributions for employers and employees, as these have an impact on the hours that employees are offered, and on whether they qualify for pension contributions.

“There’s been positive news this week for young people, with the increase in the National Minimum Wage above the recommendations of the Low Pay Commission for apprenticeships. Better quality apprenticeships are what we need to get young people working, learning and earning, and there are signs we’re moving in the right direction on this.”

Forget bonus culture and use behavioural science to boost employee motivation, says new CIPD report

Reward specialists and HR professionals could significantly increase employee motivation with a better understanding of the science behind the impact of pay and reward on employee behaviour. That's according to new research by the CIPD, the professional body for HR and people development.

The report, ‘Show me the money! The Behavioural Science of Reward’, discusses how money may not be the straightforward workplace motivator we expect, and highlights how alternative approaches to reward may be more effective in increasing employees’ intrinsic motivation to succeed. By evolving the reward structure, organisations can take more control over the complex array of factors that determine their employees’ motivation and effectively enhance their business success.

According to the CIPD’s report, employees’ perceptions of rewards are defined by the circumstances in which they are received. For example, a bonus received during tough economic times will be perceived as having much greater value than the same reward given in times of prosperity. On the other hand, a bonus may be perceived as having less value if the recipient considers their own performance to be stronger than other employees who receive the same amount as part of a team reward. Given the tendency of people to overestimate their own abilities when performing familiar tasks such as those at work, reward and HR professionals need to be particularly wary of promoting a performance-based pay scheme to avoid disillusionment if employees’ rewards don’t match their expectations.

Jonny Gifford, Research Adviser at the CIPD, comments: “These are interesting and challenging times for reward specialists. We need to recognise employees when they go the extra mile and add increased value, but there are a number of behavioural factors that should be considered when shaping a reward programme. Crucially, we must acknowledge that monetary rewards aren’t everything and that they can even distort people’s motivation. For example, enticing the workforce with financial incentives and a strong bonus culture can lead to unwanted, risky and even unethical behaviours. Equally, because we tend to overestimate our ability as individuals, many if not most people find performance-based pay attractive in the first instance, but ultimately disappointing and demotivating. The key is having a flexible reward package that takes into account behavioural nuances and doesn’t rely solely on a wad of cash as the only means to motivate staff. It’s a change in direction for many but should also be welcome news for organisations who, in a challenging economic context, need to be more creative with their rewards package.”

The report suggests that alternative rewards can build intrinsic motivation among employees. It notes that recognition through appropriate symbolic awards – for example, through employee award schemes or discretionary ad-hoc gifts from line managers – are consistent with a workforce whose desire to succeed is self-sustaining, rather than driven by a desire to earn more money. These rewards also have the added benefit of being cost-effective and easy for businesses to disperse at ad-hoc moments, rather than building up to a single moment of reward in any given year.

Time and timeliness are key aspects explored in the CIPD’s report. It references a study by Zedelius and colleagues* which found that when people were promised reward for a later task, they started to perform better at intermediate tasks, even when those weren’t subject to a reward. It also explores the difference in perception between instant gratification and rewards that are of equal value but deferred, such as pension contributions. This difference is starkest among the youngest workers, who place the least value on pension contributions and other benefits deferred to later life.

Charles Cotton, Performance and Reward Adviser at the CIPD, comments: “Workplace pension schemes boost employee pay packets by thousands of pounds over the course of their employment but without the instant gratification of seeing that money land in their bank accounts each month, many employees fail to value the schemes. When it comes to reward, it’s important that businesses regularly reinforce the total value of the package that they offer to individuals and pay equal attention to both short and long-term rewards. This can include communication and education, but should form part of a well-thought out financial wellbeing strategy.”

With such a range of factors in play, the report concludes that the best reward strategies take into account both individual and group success, while not being overly complicated. By rewarding people for their individual performance as well as their contribution to a specific team or the overall company’s success, a business is most likely to see improved engagement, enhanced performance and good citizenship behaviours.

*Zedelius, C, Veilung, H, Custers, R., Bijleveld, E, Chiew, K and Aarts, H. (2014) A new perspective on human reward research: How consciously and unconsciously perceived reward information influences performance (Cognitive and Affective Behavioural Neurosicence. Vol, 14, pp493-508.) To download the full report, click here

Fourteen Rules Millennials Have to Master in the Workplace

In this era, there is no place for free riders, either you rise to reach the top or you just don't survive. To thrive in this challenging world, millennials have to master the new set of rules which are not taught in the schools. The list is quite long including advancements in technology on daily basis, rising social media, 24/7 wireless connectivity and what not. Now the young people need to take ownership of their careers and have to promote it differently from the previous generations. The fourteen new rules millennials must learn about the modern workplace are as follows:


1.      Job Description Is Only The Beginning.
You won't achieve success if you do what you were hired for, but you'll have to do a lot more to make an identity. The job description given to you is a basic task sheet of what you have to do. One should be attentive and should lookout for new projects and collaborations and go for more learning and development.
2.      Job Is Temporary.
World is changing and so does the workplace. Corporations are acquiring companies and companies are merging into conglomerates. So there is a high risk that your team could be eliminated, your job could be outsourced now or you might lose interest in your current job.
3.      Learning New Skills.
The corporate skills that are necessary for a successful career are good working capabilities, proficient communication skills, the emotional capacity and the additional qualities. By learning and incorporating these skills you can perform better at work, build stronger associations and work towards receiving encouragement on your job. At times talent is tied to an individual's own personality rather than a formal training. These are allied with a person's Emotional Intellect Quotient.
4.      Reputation Is The Greatest Asset.
The things that are going to improve your career are your skills, the projects of which you are part of, the level of trust your colleagues have on you, whom do you know, what others know about you, what you are best at, etc. Eventually what you do is important and highlighted because others take a perception from it, so money and reputation would follow you automatically.
5.     Nothing Is Personal.
Small postings on twitter and facebook about your boss or your colleagues could ruin your career forever. Even small things like your dressing, your behavior, body language, social networking, etc. could build or break your image in the most horrible way.
 6.      Positive Image
The new media has built convergence between private and personal lives. Online social networking sites have connected people of similar interests. This helps in building a reputation and at the same time one can dig deeper into opportunities one is passionate about and wants to learn the expertise.
7.      Working With Mixed Generations.

Currently in the market, you find the Baby Boomers (Executives), Generation X (Managers), Generation Y (Employees) and Generation Z (Interns). All of these generations are different from the others because of the difference in view of workplace, communication ways and of course the difference of eras. Learning the management of relationships despite of these differences would earn you a successful career.
8.      Boss Comes First.
You see low chances of promotion, if your boss is unsuccessful so indirectly or directly he would rub off his anger on you. To tackle this issue you'll have to support your boss's career, by making his life easy and earn his trust. This way he'll take you along the success steps whether in same organization or in the other organization.
9.  Networking.
This is no more an information economy, we have moved towards a social one. On the other side, it is now more about your relationships with people you work with and less about your technical understanding of the work because now anybody can learn anything with a simple click.
10.  Rule Of One.
It is about that one person who can change your life in a better aspect, whether it is related to getting a job or your marriage or starting a business or anything else. There are people all around saying no but the yes from that one person would trigger that you are on the right track.
 11.  You Are The Future.
As predicted that by 2025, the workforce will constitute Generation Y. It means that you will be on the forefront despite of being early in the career lead. All you need to do is position yourself to take up the leadership roles when the older generations retire.
12.  Entrepreneurship, Open For All.
Entrepreneurship is the procedure of commencing a company or business. The entrepreneur or the opportunist is a risk taker, who develops a business plan, acquires the human and supplementary needed resources, and is fully accountable for its accomplishment or failure. In today's world if you want to go ahead of the competitors, you need to work on your company's management as a venture capital firm. It about selling your innovative idea and being persistent.
13.  Accomplishments Matter.
Calculating the hours one has put in on the job has become outdated. The thing which matters most is one's own value and staying firm on delivering tasks based on that value, so that one can measure his own success and earn encouragement.
14.  You Career, Your Rules.
Time has changed, now there isn't anything like relying on anyone else, one has to be accountable for his own career and is in charge of his own life. The issues that must be resolved are learning, growing and in return benefiting your own self.