Hay Group presented the findings from an exclusive HR-specific recalibration of Fortune magazine’s Most Admired Companies rankings, as well as key business practices that distinguish these companies from their competitors.
For more than 10 years, Hay Group has partnered with Fortune magazine annually to identify the Most Admired Companies and the business practices that make them great. In an exclusive arrangement with Human Resource Executive® that’s now in its fourth year, Hay Group has analyzed the Fortune data and identified 50 companies that are the most admired when it comes to HR practices and key attributes they share.
You can download the report here.
Hmmmm… I was honestly a bit disappointed. If this is an HR recalibration, then Hay needs a better understanding of HR. It is distinctly compensation and rewards focused. After all, if we are looking at the most admired companies whose average stock performance is much better than the norm, we’d like to think that there are distinct differences in both employee engagement and talent management, and that these two factors are the true drivers of performance, not simply rewards. In fact, I’d go so far to say that rewards is quite peripheral to the performance and admiration equation, but that’s just my opinion.
Then you get to some stuff where I really just wonder how Hay did the survey. Looking at the slide where they discuss performance measures, and only 11% of the peer group agrees that their performance measures are realistic and achievable leads me to think that there is a problem with their survey tool. If I’m the consultant looking at these results, I’d go back to the data and the survey and find out exactly how the results were calculated and see if there was a problem with the interpretation of the data or if I had cut the data in a particular way to introduce some sort of skewing or bias.
That said, I am a firm believer that every opinion, statistic and trend line has some basis in truth. Even though I don’t know what the methodology was, I don’t agree with the narrow breadth of what they looked at, and the numbers look strange to me, there are some very compelling messages here. The connection between effective rewards programs and rewards communications can’t be denied. Rewards communications are where employee engagement to incentive objectives occurs. Too many organizations simply roll out their incentive programs without anywhere near the necessary communications and change management to make the incentive program successful. Regarding total reward statements, Bruce Lasko of the Hay group states:
Surprisingly it’s not the value. It’s the communication. We’ve spent hundreds of millions on providing benefits that employees didn’t value, understand or even know existed. Regularly communicating the ‘total value’…significantly improved the effectiveness of our rewards programs.
So perhaps we don’t have a good idea of what HR programs impact performance and “admiration” based on this report, but we can say that incentives that are strategically aligned and effectively communicated are the ones that are successful. We can also surmise from anecdotal data that what really makes a difference in performance is not compensation and rewards, but ultimately talent development, growth opportunities, and overall performance management.
5 responses to “Most Admired?”
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Excellent point about not communicating the total rewards package in a way in which employees understand or appreciate fully. The goal of a total rewards package is to achieve the highest return on investment with the optimal mix of rewards. Recognition is a critical component of that package, but is often forgotten by staff at all levels who typically only see pay, benefits and perhaps equity reflected in their compensation statements. Adding recognition to the mix of total rewards offers a significant opportunity to motivate and engage employees.
I blog much more extensively on this topic on posts here: http://globoforce.blogspot.com/search?q=total+rewards+package
Excellent point on communication. As for the report, I’ve found that most of the large consultancies produce reports and white papers that concentrate on what they do in their practice. In Hay’s case, that’s compensation and rewards. That gives them tunnel vision.
[…] Most Admired? Systematic HR Monday, March 2, 2009 Hay Group presented the findings from an exclusive HR -specific recalibration of Fortune magazine’s Most Admired Companies rankings, as well as key business practices that distinguish these companies from their competitors. For more than 10 years, Hay Group has partnered with Fortune magazine annually to identify the Most Admired Companies and the business practices that make them great. In an exclusive arrangement with Human Resource Executive® that’s now in its fourth year, Hay Group has analyzed the Fortune data and identified 50 companies that are the most admired when it comes to HR practices and key attributes they share. READ MORE […]
Some good points raised all round here. I believe the Fortune Most Admired Companies is arrived at by executives/analysts/etc ranking large organizations. Hay Group administers the survey on behalf of Fortune and the quid-pro-quo for doing so is they get to deep-dive into an area of interest of their own to see what these same companies do in that specific area (in this case reward). I find their insights quite helpful.