Rethink Rewards for a Globalized Gig Economy

Compensation strategies should address increasingly diverse workforces

Stephen Miller, CEBS By Stephen Miller, CEBS June 24, 2019
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LAS VEGAS—"In today's globalized gig world, rethink everything you're doing," said Robert J. Greene, SHRM-SCP, during a June 23 workshop for HR professionals at the Society for Human Resource Management 2019 Annual Conference & Exposition.

Greene, CEO of Reward Systems Inc., a global rewards consultancy based in Glenview, Ill., said a confluence of transformations are reshaping how organizations reward their workers and stay competitive. "HR can help organizations to navigate the rapids," he said, and the time to do so is now. "Waiting until your house is afire is not the time to look at fire insurance."

The New Realities

"Technology is letting us deconstruct work and put it back together in discrete pieces," Greene said. Work is more project-based, fostering the rise of outsourcing and gig work outside of a traditional employment arrangement. Similarly, organizations are feeling pressure to allow more internal mobility—letting workers enhance their skills by moving from project to project, rather than staying locked in the same roles.

People may move in and out of projects, work on multiple projects at once, and vary their roles across projects, he noted.

At the same time, global talent mobility has created workforces that represent a wider range of mindsets, values and priorities, and this "requires performance-rewarding strategies that are appropriate for culturally diverse workforces of employees as well as outsiders," Greene said.

Performance and rewards management strategies and programs must be agile and evolve with the changing work world, he advised. Employees may appreciate the opportunity to do projects that allow them to develop their skills and grow their careers more than increased pay.

Insiders and Outsiders

Bringing in outside workers for specific projects can cause employee relations challenges, especially if, for example, workers learn that an outside contractor is being paid at higher hourly rates than employees doing comparable work.

Greene advised employers to ask themselves, "When we bring people in from outside, what message does it send to current employees?"

Criteria for outsourcing to a contracting firm, hiring gig workers (often taking advantage of the proliferating number of talent platforms), or partnering with other organizations for specific projects include:

  • Costs versus upskilling current staff.
  • Quality standards.
  • Competence of current staff.
  • Ability to integrate work with existing staff.
  • Confidentiality of work.
  • Effect on current staff's morale.

When an outsourcing firm or gig workers are hired on a project basis and the contract calls for them to pass their skills and expertise to the organization's permanent staff, be aware that outside workers may have little incentive to actually do so, or may stretch out the time in which they were expected to complete the project and share their skills, Greene warned.

Gig Workers on the Rise

Gallup research last year found that 29 percent of U.S. workers have an alternative work arrangement as their primary job—including one in four full-time workers (24 percent). When Gallup included workers who have any connection with gig work—for example, those who work multiple jobs—that proportion is 36 percent, meaning more than 1 in 3 workers have some type of gig economy job.

"The gig economy presents unique challenges for organizations with traditional management practices, but it also provides opportunities for companies seeking talent in a fast-paced, competitive marketplace," according to Gallup's report, Put the Gig Economy to Work for You.

"Managers have limited control over gig workers' performance and engagement compared with traditional team members," the report states. "Leaders must identify the best projects for gig workers and communicate a compelling value proposition for them."


Internal Mobility

While turning to outside workers is sometimes the right course, often talent within an organization is not being effectively used. "HR needs to convince managers to identify and share the talent they have," Greene said. "Organizations need to reconfigure career management systems and provide clear career paths."

Managers sometimes "hide talent" because they don't want to lose valued employees to other parts of the organization. One solution is to reward managers with incentives to share talent.

[SHRM members-only HR Q&As: Can background checks be conducted on independent contractors and other contingent workers?]

Reward Cooperation

In a project-based world, "cooperative behavior may be more important than competitive behavior," Greene said. Merit-based pay, which can provide incentives for better performance, can have the downside of leading employees to see themselves in competition with one another.

Greene favors combining individual incentives with team incentives, measuring and rewarding both individual effort and contributions to overall group effectiveness. As organizations become more knowledge-based, "motivate employees to freely contribute what they know to the rest of the organization," he recommended. The apprentice model of "working elbow to elbow" helps share tacit knowledge that can best be transmitted person to person, he noted.

Culture Affects Rewards Strategy

Technology has made it easier to staff organizations with people who live anywhere, Greene said. But a globally mobile workforce, with diverse beliefs and values, can be a challenge to measuring and rewarding performance.

When hiring workers who live around the world, be mindful of differing laws and regulations. In some countries, he said, stock options are taxed when issued, rather than when sold. In other countries, owning foreign stock may be prohibited. He pointed to DuPont's experience when it tried to grant the same number of stock options to all employees globally. The firm eventually discovered that due to legal and cultural issues it could not use stock options in 25 of the 53 countries where its employees were based.

Recognition and rewards are also perceived differently based on cultural factors. In some countries, singling out an employee for special recognition—employee of the month, for instance—may be seen as violating group norms and may embarrass recipients by placing them above their co-workers. Recognition—whether with a ceremony, gifts or public acknowledgement—should consider social mores and traditions.

The Golden Rule may say treat others as you would like to be treated, Greene said, "but the Global Golden Rule says treat others in the way they would like to be treated."


Related SHRM Article:

External Workers Are Valuable but Worrisome, HR Says, SHRM Online, June 2019


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