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Mark Thompson

Hay Group

Consultant

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Gulp. Are we “reward people” about to be replaced?

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With Terminator V about to hit the big screen, we are being reminded once again of the persistent vision of a future where we are dominated by machines.

Even Stephen Hawking is in on the act, claiming that machines pose a threat to our very existence. And now I’ve just come across – rather late in the day since it came out in 2013 – a detailed academic analysis of the topic by Carl Benedikt Frey and Michael A. Osborne sponsored by the University of Oxford.

Their paper (The Future of Employment: How Susceptible are Jobs to Computerisation?) comes up with a formula for determining the probability that any particular job might be undertaken by artificial intelligence.

I won’t go into the details, suffice to say that the most eye-catching conclusion is that there is a 96% probability that compensation and benefits managers will not be human in the future!

In fact, this is the highest paid occupation by far that might well be replaced by a machine. 

What does this say about what Messrs Osborne and Frey think about what we reward specialists do? I think I can guess: we sit at our computer screens analysing market prices, calculating compa-ratios and forcing a distribution of performance ratings to drive pay decisions.

There is a 96% probability that compensation and benefits managers will not be human in the future.

Well, if that’s really what we do all day then Judgment Day may not be far away. 

I’ve heard some reward directors say that the most reliable way to determine pay relativities and pay levels is simply to look at the market. The market is the font of all knowledge – if only we could access it reliably.

This is a complete misunderstanding of the art of reward management: it’s not the development and implementation of a monstrous and ever-expanding process of market pricing.

It’s true that many reward managers have recognised in recent years that the employer-value proposition is about more than just money and that ‘non-cash’ reward is part of their bailiwick. Still, the mania for benchmarking persists, even in relation to non-cash reward. This herd mentality simply doesn’t work:  just because companies like Google, Netflix or GE does something, it doesn’t mean that the same thing will work everywhere. 

Reward is at the heart of talent management.

For reward to truly be at the heart of talent management, the reward practitioner has to understand the long term talent needs of the business they serve. This means they have to know that business, its mission, its strategy and the economic and commercial environment within which it operates.

And the whole business of implementation and change management that goes with the reward job is, as we all know, fraught with politics and pitfalls that requires all the guile a human brain can muster. Even benchmarking is not as simple as it sounds and requires interpretation and judgment as well as number crunching to get right – this is not a job for Arnie either.

So don’t panic – unless you are a the basic benchmarking drone, your job is safe.  Salvation is at hand and we have nothing to fear from the rise of the machines!

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Mark Thompson

Consultant

Read more from Mark Thompson
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