The Reward Skills required in a FTSE 100 Head of Reward
I come into contact and talk with Heads of Reward via two channels:
- Selection, assessment and engagement activity on behalf of Strategic Dimensions’ clients
- Programme delivery, research and member engagement on behalf of PARC
My activity in support of the recruitment of Heads of Reward is informed by the learning, insights and shared experiences of our PARC membership which is predominantly comprised of Heads of Reward, Heads of Executive Compensation, Heads of Performance, and Group HR Directors.
Time spent talking with talent in the reward space, combined with considering what has supported successful Heads of Reward to be acknowledged as such via their contribution in raising organisational performance, has resulted in an effort to outline what I consider to be the Reward Skills required in a FTSE 100 Head of Reward.
Some of these skills are equally valid for success in reward roles outside of the FTSE 100. Certainly, opportunities to develop them should be sought out via your current role, or in a move to a new organisation if you want to be a FTSE 100 Head of Reward.
I used the word “skills” as it’s not about an individual just knowing about content, concepts and case studies, it’s about being able to use what you know in a pro-active and effective way to raise organisational performance. Which, we would argue, is the point and purpose of the Head of Reward role.
For the purposes of this article I am categorising Reward Skills into three distinct sets:
- Above the Line – “strategic skills”
- Below the Line – “transactional skills”
- Interpersonal – “interaction skills”
1. ABOVE THE LINE – “STRATEGIC SKILLS”
- Do you understand your organisation’s business model? How does it make money in a sustainable way?
- Does your organisation have a performance model that is recognised, understood and in positive service of the business model?
- What are your organisational KPI’s and are they the right ones for what the organisation seeks to achieve?
- Are you able to evidence how the reward strategy is linked and in support of the organisation’s business and talent strategy?
Remuneration Committee (RemCo) Effectiveness
- Are you able to create and lead the right balance between compliance and performance?
- Do you have a detailed enough understanding of (individual) longer-term performance models to create a plan that is in support of raising organisational performance?
- Have you got good sight and understanding of what could go wrong – and how to mitigate its effects?
Setting ‘standards’ for global reward community
- Are you creating and delivering solutions and outcomes that are viewed as benchmark in terms of positive impact on organisational performance?
Seeing linkages and opportunities
- Are you able to identify and exploit to the benefit of your organisation opportunities that you may identify because of your deep understanding of the organisation?
2. BELOW THE LINE – “TRANSACTIONAL SKILLS”
The Head of Reward Role can be as much about doing and delivering as it is about strategising and designing. You should consider your current skills and experience against the following (non-exhaustive) list.
- Do you have a strong understanding of governance / compliance / annual reporting (including pay ratios) and are you keeping up to date?
- Do you understand benchmarking beyond just gathering the data?
- Are you confident with Employment Contracts (including severance terms?)
- Are you able to contribute to the creation of global mobility programmes?
- Can you deliver a job evaluation process whilst acknowledging any limitations?
- Are you confident in designing and managing an Annual Incentive Plan?
- Are you confident in Share Plan management processes?
- Do you have enough knowledge of selecting and using HR Technology platforms?
- Can you lead on the why, when and how of Salary Review processes?
- Do you understand the mechanics and requirements of data room processes i.e. for M&A?
- Are you confident in your knowledge of the process and tax compliance issues of payroll?
You may have colleagues and team members who have delegated responsibility and accountability for the components of the list above, but you need to have your own skills and confidence across the breadth of your team’s activity.
3. INTERPERSONAL – “INTERACTION SKILLS”
Influencing, questioning and challenging of colleagues and fellow leaders
- Flexible communication skills, likeability, curiosity and empathy are a great asset in the Head of Reward role.
- Interest in and understanding of your organisation’s customer base is critical to the Head of Reward role and your interactions with other leaders in the business.
- Effective management and leadership of internal and external talent across different areas of expertise is increasingly important in the role of Head of Reward.
- Some argue that a Head of Reward can know more about his or her organisation (people, operations, systems) than any other person in the business.
- Presence and authority inside and outside of your organisation is critical and can be achieved in a way that best suits your own style of building confidence and trust in those you interact with.
- Comfort with new ideas and concepts is invaluable in the role of Head of Reward.
This categorisation and list of Reward Skills is not presented as exhaustive or “right”. It is the culmination of reflecting on time spent with reward professionals and I am especially thankful to Phil Wills for sharing his own views and insight on what makes for a great FTSE 100 Head of Reward.
Each year PARC delivers a Strategic Reward Skills Masterclass. In 2021 we will be delivering two versions of our Masterclass. One will be in the format of a two-day residential programme and one will be in the format of a two-day online, interactive programme. If you are interested to receive more information, please email Karen Clark.
For more information about PARC and Strategic Dimensions please visit our websites.