Organisational culture is just as important as the organisation’s strategy, indeed they can support each other. Recently, bank chiefs’ bonuses have been in the spotlight, and look to stay there for some time! What is critical is how the culture of the banks can be changed so that rewards are perceived to be more fair balancing the needs of all stakeholders. This means looking at the organisation’s purpose and design as a whole. How are rewards allocated? how are rewards for team effort calculated? what should be basic pay, and what element should be the “extra effort” that attracts a bonus? and what about the rewards from the job itself – the intrinsic motivation to be there, given a certain minimum pay level is reached? So, as politicians, shareholders and boards struggle with how to sort out the pay and bonuses issues, the banks still still to think about the organisation as a whole. They need to assess where it’s not working as well as it could be, and develop ways to improve the situation. This could involve:
– altering the design and flow of the processes
– changing the reporting and team structures
– changing the systems
– changing the culture.
Each one of these, along with pay, is a major topic. They often involve significant change to people’s work, relationships, job roles, expectations, and can induce skepticism and fear. Cutting top execs bonuses is bound to have some kind of effect further down the hierarchy. Thus, change needs to be managed seriously and sensitively, and this may involve coaching, leadership and development.
The lessons from banks apply to all organisations as they grow. Setting up fair and equitable pay systems where the employees have a say from the early beginnings of a company is bound to increase motivation, and in turn will encourage all staff to contribute to innovation.