Article: Building a reward system for effective change management system

Compensation & Benefits

Building a reward system for effective change management system

To initiate any Change Management exercise, communication alone is not enough, an effective reward system is equally vital

People are enjoying their rewards because you are rewarding them for working the way you wanted


And don't forget, that they too are thinking - if I've got to work to get new skills, what's in it for me?


An effective re-ward system coupled with communica-tion and learning is one of the most critical levers of the change process. However, even if the change message is well communicated and well received and people are given the opportunity to learn so that they can behave differently in the new environment, it doesn’t follow that anyone is going to change their behavior unless it is backed up by a reward system.

Over a period of time at Avenir, we discovered through our various implementations in different industries of our proprietary Change and Performance Management (CAPM) programs that the joy of learning, skilling, cross skilling, better work life balance as well as meeting corporate goals, talent pool management, et al, can be brought together by having a comprehensive reward system that underpins the change management programs.

Why is this question of the reward system so important? That’s simply because people only work for lure of reward. For some people the reward may be mainly financial, but for others, it will be a question of good company, good coffee, status, brain stimulation, good resorts and restaurants, and free tickets for movies, games, theatres. In short, a better and a more wholesome life.

When change management utilizes the various effective time management principles within the program, it leads to soft benefits besides achieving corporate and individual goals and achieves the ultimate holy grail – work life balance and creates a more productive and efficient work force and an organization that does “more for less.”

Communication and learning systems can be a bit theoretical. Of course, it may cost something to produce a communication package and to put the learning system in place but these activities don’t actually hurt anyone. It’s only when the change process gets implemented and begins to change the reward system that people perceive that they are going to be in danger of getting hurt and everyone will be able to see if management is really serious about implementing change. This is when an effective reward package and reward delivery system needs to come into place.

Rewards are great, aren’t they? But remember, people are enjoying their rewards and having a good life because you’re rewarding them for working the way you wanted them to work in the past. Now you want them to work differently and to behave differently. So you’ll need to reward them differently. First, you’ll need to reward them to change, and then you’ll need to reward them to work the way you want them to work in the future. You’ll want to reward them for changing - getting the right skills and behaving the right way. You’ll want to reward them for going a bit further than average and doing things really right. You will also want to reward them to collaborate, to innovate and to work to achieve global goals than chase local optimizations.

And don’t forget, that they too are thinking - if I’ve got to work to get new skills, what’s in it for me? How’s it going to work if I’m doing a great job, but the other team members aren’t? Why should I lose out because the others aren’t performing? How am I going to move ahead if there are fewer levels in the organization? What sort of reward will I get? Is it worth the effort to change? The reward system has to be more group or team orientated rather than individual performance orientated.

So before plunging into a change project, you need to answer a few questions about the current and future reward systems. First, concerning the current system - What are the current rewards? What is currently rewarded? How do you give the reward? And then about the future system - What are the rewards going to be? What’s the scoring system going to be? Who’s going to be doing the scoring? How will rewards be given? Who is going to be rewarded? Who will do the rewarding?

Senior Management including CEOs, VPs, Executive Directors, Managers, Supervisors, and the Change Engineering team members all need to be informed of the answers to these questions upfront. And make it plain upfront to the people who do the rewarding that if they don’t give a reward that is due, they will be in deep trouble as it will give the impression that you’re not serious about change. And once people start thinking that you’re not serious about change, and begin to doubt your integrity, then no one is going to change their behavior.

A final point – your change management program and the reward schemes that underpin it must ensure a win-win at all levels and a greater incentive for cross-functional collaboration. This will engender out-of-the box thinking. Build an effective communication delivery system to highlight early success stories. Publicize and reward aggressively and use your informal communication mechanism to ensure best practices are shared quickly and the company is on the track of continuous improvement.

Sambit Chakraborty is Principal Consultor at Avenir. He can be contacted at:

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Topics: Compensation & Benefits, Culture, #ChangeManagement, #TotalRewards

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