European Rewards in an Era of Austerity

Abstract

The author’s contention is that just as our political leaders are realizing that, 4 years into economic depression, they need to combine their austerity approach with a new focus on investment and growth; so the balance of compensation and reward activities in our organizations needs to shift away from an extreme cost focus toward policies that more positively engage their employees and develop their talent. Using data from a comprehensive study of reward strategies and practices among 252 organizations based in 25 countries in Europe, he profiles a number of dimensions of this shifting balance: from low to added value pay, from fixed to variable rewards, and from a focus on technical design to paying more attention to reward delivery, emphasizing line manager involvement and more open employee communications. Making this shift will take courageous leadership in the current climate but will, he argues, of itself be a powerful force for reengaging employees and driving recovery in corporate and national economic performance.