Reward and conquer: When pay is not enough

Life is far from easy for a law-firm HR director, especially in today’s competitive environment where motivating staff and driving performance requires much more than a competitive pay policy and good benefit package. HR director Louise Hadland explains the people-management strategy at Shoosmiths and why she believes the firm’s reward culture is a step in the right direction.

As I wake up each morning, I pray at my shrine to Maslow (motivation guru circa 1954 – more of whom later).

I do this for inspiration to get me through another pay round, and wonder if the odd sacrificial offering might bring better results. “Head of partner, limb of trainee, placate this demanding deity…” This is the mantra I often repeatedly dictate during what I like to refer to as my commute to work (17 minutes of country lanes).

It is not my five years in the legal profession that has driven me to such extremes. The inspiration of Gods and offerings has been stimulated by a recent trip to Egypt, where I wondered how Rameses II motivated thousands of people to build and decorate the beautiful temple at Abu Simbel? On a wet Monday morning, the thought of just giving everyone a damn good flogging to get on with the job is quite appealing (I haven’t met an HR manager who doesn’t harbour similar, secret thoughts). But the people who built temples and tombs 2000 years BC were not slaves. They were peasants who could not work their fields during four months of annual flood, so they organised themselves into ‘gangs’ and sold their labour to the local Pharaoh in return for food and shelter – their local union reps negotiating the best deal possible. It is some small comfort that an Egyptian HR manager was contemplating performance management, motivation and retention 3,000 years ago.

Britain in AD 2004 sees our staff well removed from Maslow’s first rung of needs – food and shelter. In fact, most of us are well on the way to the top of what he describes as a hierarchy of needs, that is, self actualisation – the need to develop potentialities and skills to become what one believes one is capable of becoming.

Managing such needs requires a complex reward structure and a delicate balance between driving performance, motivation and retention. Wouldn’t life be wonderful if we could float away on a Maslow magic carpet, determining what we are paid and how our achievements are recognised, while sipping a cocktail of motivational nectar. But life isn’t like that. Productivity, profitability, cashflow and billing bring us crashing back to earth.

Plotting a management course through the complex world of reward requires clarity of vision and, most of all, consistency of message.

They say the first rule of survival is to make a plan. And being clear about where the firm is going is the focus of the plan. Devising a plan that focuses internally on trying to keep staff happy is doomed to failure; it simply is not possible to keep all people happy all of the time. Whereas a plan that explains a route map for the firm, which spells out what size and shape it will be, what markets it will operate in and its financial aims, is all you need to build a strong reward structure. For those who don’t mind the management speak, tie your reward strategy securely to the strategic direction of the firm. If your firm does not have a clear strategic aim, devote your energies to the leadership development of your top team. This is because any work invested in reward strategies is quite likely to be undermined by changing or conflicting messages from the top of the organisation.

Once the firm knows where it is going, you, as the person responsible for managing reward, will know:

What type of markets and clients staff will have to deal with;
What calibre of people you require and what the market pays for such people;
How much money will be available for imaginative benefit schemes;
How much development your existing people will need to come up to the mark;
What staff structures are required and how to articulate promotion opportunities;
What message the firm wants to say about itself in the marketplace, and how staff need to behave to be consistent with that message;
What success looks like, so that you can replicate the same criteria through appraisal, promotion and pay reviews, so that staff get a consistent message about what is valued.

At the end of the day, you will be able to repeat success stories in all your communications. And, before you know it, you will be featuring in the ‘Best place to work’ in The Sunday Times.

Of course, it’s not that simple, but I think you will get the idea that reward in its broadest terms covers every aspect of people management, and it is so important that the same message runs through every facet of the firm. The days when reward was about cash and benefits alone are gone forever. The emphasis is on total reward, including work environment, quality-of-life considerations, promotion opportunity and recognition, as well as financial compensation.

It has taken Shoosmiths many years to achieve a joined-up approach to reward management and we still haven’t got it right. A strategic review some three years ago clarified where the firm was going and what its priorities were. We agreed that, within our chosen markets, we wanted to embark on an ‘upper quartile’ spiral. Quite simply, this meant more profitable clients, which made more monies available to employ the best staff who would in turn attract more profitable clients.

We looked at our salary structures in relation to this aspiration. Shoosmiths is not a City practice. We have a national client base, served from seven different regions. We do not charge City prices nor expect City billing levels from our staff; therefore, we cannot pay City salaries. The maths behind this logic is simple, transparent and readily understood by staff. We want to attract and retain the best people, however, so we have to be competitive in the salary stakes. From this simple analysis, we have adopted a pay strategy, which is based upon market rate, positioned between average and upper quartile. Our geographical spread means for the lower PQE (post-ualification experience) levels, we have two different rates, depending upon the prevailing market rates. Our message on pay is clear and consistent.

We all know the theory that says that staff are not motivated by money alone. So to compete to attract and retain the best staff, we looked at our work-life balance offering. Current policies include a flexible-working policy that is open to all staff. We have a well documented home-working policy and the technology to support it. At this point in time, one in nine lawyers work part time and, overall, one in five staff are part time. This includes both sexes. Sabbaticals are open to all staff with five years’ service. Not every request for flexible working is granted, client needs come first; we merely ensure that we do not superimpose an archaic layer of bureaucracy between the employee and the client. In our offices, coats remain on hangers not on the back of chairs. Senior staff can access a flexible-benefits scheme and all staff can flex their holiday to a maximum of 33 days per year. In this latter scheme, staff have two opportunities a year to flex holiday. Who knows what a year might bring and the need for more (or less) holiday may not become apparent until half way through the holiday year, hence, two bites at the cherry. The firm also offers a pension scheme and life assurance, private healthcare and permanent health insurance. Lower grade posts do not access all benefits immediately, but all staff become eligible for all benefits after five years’ service. We also have over 100 affinity benefits (discount schemes).

To motivate staff and drive performance, we need more than a competitive-pay policy and a good benefit package. Contemporaneously to our strategic review, we undertook a brand review. We examined what our clients wanted from us, what we felt we were good at and what our competitors were doing. From this analysis, we were able to identify what characteristics set us apart in the competitive legal arena. This process always reminds me of plastic carrier bags. When invited to a party, we go to our collection of carrier bags to find a bag to carry the present or bottle of wine we are taking. Invariably the first one out is a Tesco, Sainsbury’s or, heaven forbid, Co-Op bag. We hastily stuff this bag back into the melée in search of that elusive Harrods or John Lewis bag. Who wants to be seen at the happening party with a Morrison’s bag? We all know why we do this, which means we are all brand aware. Similarly, we want our clients to carry their ‘Shoosmiths’ bag with pride. To achieve this we have to be as clear as Harrods or John Lewis about what our services stand for. A training programme was put in place to enable staff to understand what branding is all about and how the Shoosmiths brand impacts on every role in the firm. To deliver our brand promise, we need to ensure our staff deliver valued legal services consistently and reliably. To achieve this we have asked our staff to undertake four key behaviours at all times, with both internal and external clients:

Talk business sense;
Be within reach and responsive;
Pull together;
Take initiative.

We have reinforced this message on mouse mats, screen savers and calendars. But, most importantly, we have a culture that enables us to describe to staff what is important, and what we expect from them.

Our appraisal process is built around measuring achievement against objectives set around these four behaviours. After the initial training, staff were asked to commit to four actions (one per behaviour). These commitments were fed into the appraisal process and staff were held accountable for delivering against their promises.

Our fee-earner promotion process is based upon transparent criteria:

Team billing;
Personal billing;
Marketing;
Management;
Values.

No-one in Shoosmiths is promoted unless they can show that they have achieved in all these areas and can demonstrate how they have delivered the brand values. Senior, external candidates require an interview with the chairman and CEO to ensure they meet these criteria.

Our regular communication to staff includes a monthly team brief delivered by team managers or partners in charge of offices. This briefing quotes examples of successful activity against the brand values. One notable story is that of an employee who, chatting to a regular commuter on a train, listened to the gripes that a major PLC had with their current legal advisors. This information was passed to another team in another office who made contact and won new instructions as a result – that’s what we call taking initiative. Similarly, the ‘front page’ of our intranet reinforces the four behaviours with stories of positive actions by staff and client feedback, recording their appreciation of our delivery of our brand values. We also elicit staff feedback through suggestions schemes and Q&A sessions hosted by our CEO.

Our partners have participated in leadership training to develop and hone their coaching skills to ensure, in Maslow speak, staff develop their potentialities and skills, to become what they believe they are capable of becoming.

At Shoosmiths we firmly believe that to drive performance, keep staff motivated and retain the best people, our reward strategy has to be holistic. We have to tell staff where the firm is heading and who our target markets and clients are because staff need to know the context in which they are working. They need to know that what they are doing fits into something bigger and is contributing to the success of the firm. We have to tell them how we expect them to represent the firm and then put in place clear and transparent processes that regularly measure their achievements and behaviours against what we have asked and feedback their progress. We have to tell staff what they need to do to ‘get promoted around here’ and not move the goal posts or make exceptions. We need to repeat our messages and success stories through every medium at every opportunity and ensure we listen to staff opinion. We need to provide a consistent approach to pay that is capable of clear articulation and deliver HR policies that reflect a workforce that have disparate motivations.

A straw poll of our staff will tell you that ‘we try hard, but could do better’. We know this because we undertake an annual staff survey, which measures our progress to reward, motivation and retention. Those that have studied statistics will also know that through such a survey we can measure the interdependency of these variables, which has informed our holistic approach to reward.

The ‘deal’ we strike with our staff in return for their performance, motivation and retention is becoming as complex as any legal deal. On a bad day it can feel as if no matter what we do, we cannot please our staff. As an erstwhile colleague used to say, it takes a lot to please and so little to offend. But I console myself that no-one has yet asked me to build a pyramid…

Louise Hadland is HR director at Shoosmiths. She can be contacted at louise.hadland@shoosmiths.co.uk