A fundamental risk/reward contract in business is between people and their organisation. Sharing risks and rewards in different proportions and mixes defines many relationships between people and organisations - employees, volunteers, full-time employees, part-time employees, contractors, directors, share-workers, tele-commuters, shareholders, student hires, piece workers. The legal basis of engaging people is an essential point to cover, but enhanced performance is only achieved when the risk/reward basis of the organisation is supported by the risk/reward contracts within human resources.
Direct links between the risks and rewards of many organisations and their people are longstanding - seasonal workers in agriculture, contract labour in construction, volunteers in many charities, commission salesmen in certain product or service sales or partners in professional services firms. Not so common is the recognition that risks and rewards cover non-financial items and that the risks and rewards may need to vary among individuals. Non-financial risks and rewards are often implicitly shared, e.g. professional loss of face which might accrue to a firm of accountants accused of fraud will be partially shared by the staff as they pursue their careers; therefore the firm and the staff are closely aligned with a goal of probity. Organisations need to take account of many non-financial items when structuring their risk/reward packages, such as status, culture, image or flexibility. Varying risks and rewards among individuals is obvious - a young mother's needs differ from those of a young bachelor and differ again from those of an executive near retirement. Less obvious is ensuring that equity not only applies, but is seen to apply.
Z/Yen's approach to human resources stresses the need to understand the risk/reward structure of the organisation and the risk/reward profiles of the people - both people the organisation is to serve and people who work for it. Our methodology is designed to link the organisation strategy to the underlying risks and rewards in the systems which support the strategy, including the human resources systems - personnel, recruitment, remuneration, training, knowledge management, information technology, career development, change management.
Working with one information technology organisation Z/Yen measured, assessed and changed the motivation throughout. Our recommendations went from the boardroom to the delivery bay and involved reward schemes, training, new knowledge systems, relocation(s), shares and options. In another client a large, bureaucratic organisation, in upheaval, we helped the staff come to terms with change by instituting an ‘acting out' day with genuine actors playing the parts of a comparable company. We ran a further ‘simulation' day to help middle managers understand the new forces at work in their changed environment and a ‘crisis' day to galvanise the board. For a FTSE 100 company we ran human resources scenario planning workshops to help human resources staff envisage the consequences of possible changes such as mergers.
Z/Yen continues to apply its methodology to understanding risk/reward structures which improve performance from human resources, including some current research into the application of ‘prospect' theory. Z/Yen welcomes opportunities to help organisations with all of their human resources issues from search, selection and interim management to the issues of change and day to day performance improvement.