Oerlikon’s SVP Global Head of Rewards and Organizational Effectiveness, Michael Stevens shares his thoughts on the drivers for change in the reward space.
For Michael Stevens, SVP Global Head of Rewards and Organizational Effectiveness at Oerlikon, the satisfaction of his work comes from implementing the foundational changes that are necessary to lay the groundwork for future innovation. It is, for Michael, more meaningful and long lasting to work at this structural level of reward rather than pushing the frontier of innovation.
His relish for and skill at this work makes him a stand-out performer in the reward space, highly valuable to the many organisations finally recognising the need for broad and deep systemic changes to their decades-old reward approach to remain competitive. “Often we’re still using tools that we’ve been using since the late 20th century,” explains Michael. “And that seems crazy when you think of the speed that other things have changed, such as technology.”
Michael says the role with Oerlikon – he previously worked with DSM – appealed because of what his first task would be: “I enjoy coming into a company that wants to find its story and brand, then implementing it into a company-wide culture. I like this initial, high-yield change. It’s endlessly fascinating – but can also be challenging because it changes everything.”
Ultimately, Oerlikon is trying to find a more coherent approach to their global enterprise, overhauling what have been silos of systems and communication channels that isolate different functions and locations. “We’re trying to make it all more coherent and consistent with global operating models across the business,” explains Michael, “and reward is part of that too. It helps.”
One of the biggest areas of challenge is not devising the new reward systems but ‘selling’ them to staff used to a different way of approaching their all-important pay and compensation. As Michael explains, “I think internal people management is the most undervalued and underestimated areas of reward. Being able to bring staff along with you in your thinking, helping them to adopt new approaches – or at least not actively oppose them – is so crucial.
“It’s the only way to drive behavioural change. And then, when you’re successful and you see people finding their voice in this ‘new language’ you’ve introduced them to and adopting the approach you’ve advocated, it’s a great feeling. Then it’s worth all the effort.”
Looking further ahead
Despite the immense focus on the present when approaching reward as part of an evolving culture at Oerlikon, Michael still has an eye on the far future and ponders what will come next. “There’s a lot of interesting thought and discussion in this area but I think we sometimes get ahead of ourselves when we envisage things changing completely and rapidly in the coming ten years. The societal set-up presents real speed limits on the changes that we can realistically make in reward.”
He points to property as an example: “Property buyers will almost always need a mortgage, which relies on a steady job and a stable income, and those working in the gig economy won’t be catered for in a way that works with this for a long time yet. That means reward won’t fundamentally change.”
Another ‘speed limit’ on transformative change is, he believes, that people will always need to find a common language and a community at their workplace, seeking above all else to feel valued and treated fairly. “Reward can provide all this and will need to keep doing so to meet the expectations of these key stakeholders.”
Two areas that will be pivotal to the possible changes are transparency and pay equity – and they are already taking off. “It’s like a runaway train, to be honest,” he notes. “We’ve reached this tipping point on pay and we don’t entirely know what the impact of this will be further down the line.” Changing legislation, notably in the US, is causing rapid changes in pay equity “and this feeds out to the world via huge international organisations, then will inevitably filter down to smaller local companies. It’s changing fast.”
What isn’t changing fast enough is the use of technology in HR functions, Michael believes. He observes a disconnect between the seamless and familiar digital technology that employees use at home and the ways in which they interact with HR and the reward function via technology. “We have some catching up to do in this area,” he says, “and we need to better understand and use these emerging AI solutions, like chatbots, which will only get more sophisticated. But we need to use them to our benefit, not deploy technology for the sake of technology. Some decisions and processes simply need a human to do them to be effectively.”
This is his segue into a topic already much discussed: technological advancement that will replace human jobs with AI and result in job losses. Michael suggests this will be a concern that governments and not organisations will take responsibility for. “Organisations will still be driven by investors who are looking at sales,” he predicts. “They won’t be able to afford not to make job cuts, but governments will act because they can’t have large proportions out of work, which is possible because job creation won’t keep pace with job losses. Governments will be forced to act.”
Unique chance to share knowledge
His interest in looking ahead and preparing for the future makes him a strong addition to the current cohort of TR2050 Members. When he heard about the new Think Tank, it immediately appealed. “It’s such a stimulating group of people and TR2050 provides an opportunity to rethink these models that have been around for decades – centuries even! – and review what is imaginable and what is possible for reward in the future.”
He welcomes the fact that the Think Tank, unlike the more competitive world of industry, provides a space for experts and practitioners to create new insights and build templates, sharing knowledge and ideas openly “without consultants trying to sell you things all the time! It’s quite unique in that regard.”
Michael believes the work of TR2050 has the potential to make an impact on the future of reward but has a note of caution to share with his contemporaries: “It’s important to recall that reward is based on human emotions and dynamics, which changes far slower than technology. We mustn’t lose sight of the people or get ahead of ourselves in a rush to embrace innovation.”
Unlikely start and open-minded future
His sensible realism is likely why he has thrived so rapidly in a profession and a role he never actively sought, like many of his peers. Michael graduated into the financial crisis of 2007/8 when few industries were hiring. “I ended up completing tax returns for expats with PwC,” he says, “which was boring, but it got me interested in equity.” When he saw a job going at Actelion in reward he applied, despite being “totally unqualified for it – and then I got it and had to just wing it!”
In his recounting, he was thrown into an executive role that he felt was far beyond his experience level, which he describes as a “rollercoaster” and a sharp learning curve. He survived and thrived, setting himself on a fast trajectory that resulted in him being able to secure his previous two, large roles, with DSM latterly and Oerlikon currently. And while he gets great satisfaction from his work in reward, he feels he is a “generalist and I sometimes wish I had taken the time to try out other roles in HR and see what they might be like. I have also considered moving into sales.”
These are musings for a far future and for now he’s ambitious for and excited by the new systems and approaches he will be bringing to Oerlikon in the years ahead. “It’s great to be working in reward at a time when it’s value is really being recognised,” he says, “plus I love the fact that reward is the only role in a company that allows you to deal with the business at a macro and micro level. You’re present at every table, speaking above governance with the executives and negotiating contracts with the employers in every sector and role. It’s unique as a job and I’m lucky to do it.”