Modernizing rewards: practical lessons from Mercer at WorldatWork 2026 

Walking the exhibit hall in San Antonio, the same theme kept coming up: leaders aren’t just buying tools anymore, they’re rethinking what rewards should do for the business. If you left WorldatWork with one takeaway, it’s this: rewards must shift from cost-tracking to outcome-driving. Below is a practical, balanced playbook that blends frontline pay fixes with a broader total-rewards strategy to help you move from administration to measurable impact.

Picture two warehouse associates, both paid $22 an hour. One operates a forklift, trains new hires, troubleshoots scanners and rotates across three departments. The other does one repetitive task in a single area. Same pay, very different contribution. That snapshot forces the question: are we paying for the job title, or for capability, flexibility and business value?

The data makes the business case obvious. Only 58% of employees say their rewards needs are being met, and hourly workers are especially vulnerable: while roughly two-thirds feel they can meet their career goals at their employer, that’s significantly lower than salaried peers. At the same time, frontline roles (production, logistics, skilled trades) are where pay growth and demand are strongest. If your pay systems don’t reflect real contribution and provide visible progression, you risk losing engagement, increasing turnover, and reducing operational agility.

Let’s look at a bite-sized set of actions that cover frontline hourly pay modernization.

• Start with clear, small pilots. Pick 1 – 2 roles where cross-training matters and the operational value of skills is easy to observe.
• Define 3 – 5 measurable skills. Keep the taxonomy tight so it’s administrable and defensible.
• Layer simple skill premiums on a base rate. Link premiums to verifiable assessments, certifications or supervisor sign-off.
• Make progression visible. Show employees how skill attainment maps to pay, scheduling preference, flexibility and promotion readiness.
• Automate the admin. Feed skill records into payroll and learning systems to reduce manual work and speed credibility.

To make rewards a true growth lever, fold frontline modernization into a broader set of priorities. These five imperatives remove repetition and give you a coherent roadmap to act:

Organizations that adopt this approach see tangible benefits: clearer career pathways, improved engagement, measurable reductions in turnover, and better operational outcomes where pay aligns with capability. Case examples include retailers using workforce and performance data to optimize staffing and a tech organization using automation to expedite fairer, skills-focused pay decisions.

That said, pilots reveal common pitfalls: admin complexity, manager calibration variance, budget and pay-cap issues, and validation consistency. Mitigate these with upfront governance, manager training, scenario-based budget modeling, and simple validation frameworks. Start small, measure early, iterate fast. If we’re asking our employees to be agile and flexible, we should expect no less from our rewards programs.

Rewards redesign isn’t just an HR project, it’s a business transformation. When you reward capability, make progression transparent, and use automation to eliminate routine friction, the rewards function becomes a strategic partner that drives growth and resilience. Pair technology with human judgment: let machines handle the mechanics, and let people lead strategy, calibration and the culture shift.

 

Want to explore a balanced pilot that covers both frontline pay and enterprise rewards strategy? Contact a Mercer rep — we’ll help you map pilot roles, build a focused skills taxonomy, design governance and measurement, and turn early results into a scalable rewards program that delivers business impact.