Are you ‘reward ready’ for business success in 2016?

Reward in a VUCA world
Future pay Reward and performance management

Given an increasingly ‘VUCA’ world (volatile, uncertain, complex and ambiguous), what is critical for business success in 2016?

Here are six aspects we’re hearing a lot about and some thoughts on what they mean for reward.


The pace of change in the world of work is unprecedented.   Only businesses that anticipate, respond and adapt to that change will survive.

No surprise that ‘new’ performance management focuses on days not years.  With annual events such as appraisals and ratings being replaced with ongoing feedback and shorter-term flexible goals.  

This will impact reward.  Expect much more ‘in the moment’ recognition, bonuses at key times such as project completion, and salary reviews as and when required.  


Companies with great diversity outperform their peers by a significant margin (Bersin). This includes fair pay.

Gender pay reporting is set for March 2016.  Businesses need a gender pay gap that’s smaller than competitors, and a transparent action plan to reduce (and eventually close) it. 

This signals that 2016 will be a year for real progress in fair pay.  Time to create or update pay structures, conduct equal pay audits, and equip managers to make great decisions that are free from unconscious bias.  As a minimum.


Organisations that network, innovate, and collaborate will be better equipped to operate in a VUCA world. 

Encouraging these behaviours will bring team goals and development conversations rather than individual goals and appraisals ratings.  This also fosters a growth mind-set and provokes less of a fight/flight response.

It will also bring more team-based reward.  Expect more internal consistency in pay, especially in lower skilled roles, and bonuses/incentives aligned with team behaviours and company results.

This isn’t to say individual contribution is not important.  Just more likely recognised through other aspects of reward such as spot recognition and personal development. 


Scarce skills, more jobs and ease of mobility means employees have greater freedom of choice than ever before.

More businesses will treat talent as consumers.  They will segment, understand, target, and sell thoughtful benefits packages and attractive employee deals (see our blog).

In contrast to a general move towards consistent reward, expect a high degree of discretion in senior, high skill and business-critical, roles.   I see a move away from endless ‘tweaking’ of reward decisions, to targeted differentiation when meaningful and worth the effort.

Performance and reward systems will increasingly recognise the importance of ‘personal brand equity’ in the overall deal.  Managers as coaches and mentors who understand individual goals and facilitate strength-based development will become the norm.


Building trust is essential for innovation and successfully bringing new products and services to market (Edelmann).

And pay really is all about trust (see our blog).  This will further strengthen the business case for clear reward structures, consistent decisions, and much more transparency in the year ahead.


The overwhelmed employee is an emerging trend.  Organisations are simplifying work environments and practices in response to information overload and increasing complexity (Deloitte).

Already we see performance management getting simpler as forms, boxes, reminders and formulas disappear in favour of quality conversations.

And as reward becomes more consistent and transparent, we will see reward systems becoming simpler and easier to understand and trust too.

It’s the simple things, communicated clearly and executed well, that will make all the difference.

Have a good Christmas and rewarding 2016.

Photo: J D Hancock, Always in motion is the future.


At Verditer we make performance and reward more effective.  We partner with clients to create and implement future-focussed reward strategies and performance management.  

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