Reason 10: Reward System Influence on Change Efforts

We have arrived at the tenth and final reason in Dr. Ed Lawler's list of ten reasons for combining and  leveraging the complementary competencies of Compensation and Organization  Development (OD) (see Lawler 1981).  Reason #10: Reward System Influence on Change  Efforts speaks more broadly of the total rewards initiatives (compensation, benefits, recognition, etc.) and how they can influence the effectiveness of organizational change efforts, both big and small.

With regard to reward systems - the entirety of the total rewards programs within an organization - change efforts may start from a point other than pay (e.g., management structure in a reorganization).  And it is critical that reward systems become a key element of the change strategy to increase the likelihood of success.

Organizations at large are systemic in nature and by nature, and therefore implications of change efforts on the reward system are inevitable.  More specifically, when reward systems are included in and align with the change strategy, the more positive the implications, the greater the employee adoption of the change.  The more negative the implications are toward an employee's rewards, the greater the resistance.

"...whether the desire is to change the culture or change the organization chart, the simple act of making a change requires a review of compensation and rewards for possible implications.  At a minimum, rewards strategy should always be included in the change effort framework."

Rather than a "Case in Point/Cut to the Chase," at this point I would like to take a step back and take into consideration these ten reasons for combining and leveraging the disciplines of Compensation and OD:
1. Pay Can Influence Organizational Effectiveness
2. Pay is an Important Cost
3. Pay is a Problem
4. Pay is Important to Individuals
5. Pay Policy and Pay Practice are Malleable
6. Pay Systems and Institutionalization
7. Pay and System-Wide Change
8. Pay is Visible and Tangible
9. Pay is a Systemic Factor
10. Reward System Influence on Change Efforts

As one might classify qualitative data by codes and themes in a research project, I see a few key themes surfacing as I review the series:

- First and foremost, pay - compensation - touches everyone in the organization.  There is little within an organization that has as far a reach or as emotional an impact as employee compensation. 

- Second, compensation is important.  It's expensive, it's meaningful, and while it may or may not be the primary motivator for certain employees, it still provides the means for living at a desired standard. 

- Finally, compensation is systemic and embedded within the relationships and connections inside an organization.  So whether the desire is to change the culture or change the organization chart, the simple act of making a change requires a review of compensation and rewards for possible implications.  At a minimum, rewards strategy should always be included in the change effort framework.

I have enjoyed entering into this conversation with you, knowing it is simply the tip of the iceberg.  Although future conversations will take different twists and turns, my point of view is deeply grounded in the importance of bringing these disciplines together to improve the dialog around increasing organization effectiveness and building the capacity to successfully address our greatest organizational challenges.  I look forward to continuing the discussion.