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Compensation Insider January 2012 posts


Published on is a blog focused on Compensation & Benefits. I write 3 times per week, on various C&B, Performance Management, Global Mobility and Governance topics.

Given that I am based in Abu Dhabi I try to give it a Middle East approach from time to time, but trust that the topics and ideas remain relevant no matter what your regional responsibilities are.

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Compensation Insider January 2012 posts

  1. 1. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comCompensation InsiderPosts published in January 2012 page 1 / 28
  2. 2. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - Table Of ContentsFresh professional goals for 2012 as a Compensation leader ......................... 3Compensation aspects of HR trends for 2012 .................................... 5What are the benefits of a good Performance Management System ? ................... 7Merit increase or bonus, how do you reward performance ? ......................... 9Why am I not on the Sales Incentive Plan ? .................................... 11Of average salaries in Europe ............................................. 13Is pay the main component of employee engagement at Fortune 100 Best Places to Work For ? 14 ..Remuneration, engagement and the GCC employee .............................. 16The limits of Emiratisation quotas .......................................... 18GCC Nationals pay : a lesson from the Y2K bug ................................ 20Create the best rules in Outlook to boost your productivity ......................... 23Get laser-focused Compensation information with Alerts .......................... 24Share the knowledge - January 2012 ........................................ 26 page 2 / 28
  3. 3. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comFresh professional goals for 2012 as a Compensation leader dont do New Year resolutions any longer.I used to go through the ritual in the past, but my motivation, like for many people, never lasted long.After a few weeks or even a few days, I was back to my past behaviour and never gave these resolutionsanother look back... until the end of the year and making the same resolutions again.Thankfully, a few years back, I discovered a book that really helped me to move my life forward. YourBest Year Yet, by Jinny Ditzler, describes a 10-question approach to setting life goals every year. Afteranalysing your achievements and disappointments over the past 12 months and learning from them, youset goals for each role you play in your life and select your Top Ten Goals for the year. You eventually gothrough a system to work on each goal you have set up every month and every week. The objective is tokeep balance in your life and never forget any side of it, so that you feel complete and moving forward inevery aspect.Even though I never fully manage to completely achieve all Top Ten Goals (but I do accomplish many ofall the goals for each role), I achieve a lot more in my life every year thanks to the thorough upfrontthinking involved in the process. Why ? Because the deep reflection and analysis helps me focus on whatreally matters to me as an individual, not on what I think I should aim for - therefore making it easy to becommitted to these objectives because I own them truly.This monthly section of my blog is about career management, yet the Best Year Yet method is larger thanjust work, and encompasses your whole life. However, given the balance that it helps maintain in life, thismethod has a direct and positive impact on your professional achievements.The approach I take to my professional role in this methodology has always been quite different to thegoal-setting methods I use for defining my annual objectives through the performance managementsystem in place at my company.Indeed, through Best Year Yet, I focus on what matters to me as a person from a professional standpoint.Sometimes, it overlaps with the objectives and projects that will define my daily activities at work. ButBest Year Yet helps me mostly to remember the real value adding elements of my professional life.So let me share with you some of my goals in my "Head of" role for 2012. Even if you dont go throughthis method, some of these objectives may resonate with you. Please feel free to adopt and adapt any ofthese as you see fit.As a team leader and expert in Performance and Rewards, I intend to : Continue to grow my team through formal certification, stretching objectives, coaching them myself, and making them teach one another. Implement processes and tools to make life easier and faster for us and for the HR community and page 3 / 28
  4. 4. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - the business, even if it takes us initially more time to develop these tools. Focus all our approaches through the lens of client service. Make time for me to maintain and evolve our vision and strategy, to support my team, and to develop and cultivate relationships with all our stakeholders. Focus on value-adding activities at my level, and improve my technical and managerial skills. Continue asking questions, challenge the status quo and strive to introduce new ideas and concepts into my professional life.Do you think these goals make sense ? And what about you ? Do you use a goal-setting method ? Go on,you know you want to share your goals as it will help increase your commitment ! Simply use thecomments section :-)Related post :Socialise your Compensation & Benefits annual business plan _______________________________________________ page 4 / 28
  5. 5. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comCompensation aspects of HR trends for 2012 Insights is a recently published report looking into "the top trends for 2012 according to SHRM’sHR subject matter expert panels". Even though SHRM, the Society for Human Resource Management, isan HR trade association based mostly in the USA, I found some of the trends to be interesting also at aninternational level.Among other topics, the report covers Corporate Social Responsibility and Sustainability, Ethics, GlobalHR, Human Capital Measurement/HR Metrics, Technology and HR Management, TotalRewards/Compensation and Benefits and Workplace Diversity and Inclusion.As per the report, some overlapping trends touch on : the impact of the global crisis on budgets, HR strategy and hiring, an emphasis on measurement of results and the development and standardization of key HR metrics to justify HR budgets and expenditures and globalization and market interdependence leading to greater volatility.Here are some aspects relevant for Compensation managers in the GCC :The development of performance management approaches, with a focus on implementing continuouscycles of goal setting, performance feedback and evaluation throughout the year.Consequently, pay-for-performance approaches also develop, especially as they help recognise andretain the best employees and control costs, still a very important aspect of managing organisations intoday’s “jobless recovery” and still uncertain financial future.Companies also increasingly pay attention to the non-cash elements of their total rewards,especially career development and recognition schemes, as they help to retain the best employees andmaintain or restore engagement levels of the staff. This is material given that the crisis and its layoffs,followed by “more work with fewer resources” for the survivors, have induced high levels of discontentamongst the workforce and productivity and success are therefore threatened.HR Systems and business intelligence become more and more expected in order to help drive thebusiness and make informed, relevant decisions about people allocation and the value of the company’shuman capital.This has an impact on the skills required of the HR population, which needs to become moretechnology-savvy and to demonstrate improved business acumen and quantitative skills.The other aspect of HR System focuses on measuring more accurately the results and value of HRthrough good analytics. These KPIs and tracking abilities also apply in the decision-making processrelated to HR budgets and funding requests. page 5 / 28
  6. 6. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comWhile some sections of the report are clearly focused on the USA and their domestic trends, the fullreport is a quick and easy read that emphasizes many interesting aspects of what HR in general will facein 2012 and the coming years. I recommend you read it and try to evaluate how some of these trendscould apply to you and your organisation.Liked this post ? Why don’t you share it on LinkedIn or Facebook ? Simply click on the link below andhelp your friends and connections benefit from it too ! _______________________________________________ page 6 / 28
  7. 7. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comWhat are the benefits of a good Performance Management System? are trying to convince Top Management to redesign the Performance Management System at yourorganisation, because the existing one is not producing the desired results and has lost its shineinternally.What are the benefits of a good Performance Management System ?Here are some of the positive outcomes you can describe to the Executive Leadership Team as theintroduction to the changes you want to introduce.Benefits of a good Performance Management System for employees More motivation to perform If feedback is delivered properly and a genuine opportunity for improvement is given, the self-confidence of the employee can raise The job is defined more clearly and expectations are clear, providing the required direction and aligning with the strategic goals of the company Development opportunitiesPositive Outcomes of a good Performance Management System for the manager Better knowledge of her team members Increased team and individual productivity/performance Prevention of larger issues through an on-gong discussion around performance (on-going feedback)Benefits of a good Performance Management System for the company The strategy and company goals are better communicated, understood, and acceptedEfforts are aligned in the direction of the achievement of the strategic goals. If there is a link to pay, the increase and/or bonus budget will be spent on a fairer basis, will be more credible, and should yield better returns in terms of recognition / motivation aspects. The content of the appraisals will help do the manpower planning and adapt the training plan to the needs expressed to perform well in the job.Of course, all these positive aspects will only happen if the system which is put in place : is aligned with the company strategy fits with the company culture is supported by the top management (through leadership by example) is an on-going process, not a once-a-year administrative event is not "stand-alone" but well integrated with other people management processes and managerial page 7 / 28
  8. 8. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - activities.In short, a good Performance Management system has the objective, and potential, to increase theperformance of the organisation through that of its members. You need to make sure it is supported by themanagement, aligned with its culture, and becomes an on-going people management activity for it todeliver all its potential benefits.Related posts :The Formula One effect on performance managementHow do you link performance management and a performance-driven culture ?Calibration of employee ratings - a rigid rule ?Enjoyed this post ? Why don’t you subscribe by email to make sure you receive my articles 3 times perweek ? _______________________________________________ page 8 / 28
  9. 9. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comMerit increase or bonus, how do you reward performance ? back to Compensation Insider ! I wish you an excellent year 2012 and hope you will be visitingmy site regularly :-)Given we are at the beginning of the year and most HR and Compensation experts are about to gothrough salary reviews and bonus payments, I thought it would be relevant to share an answer I gave 2years ago to my friend Wael. To further clarify his question, he explained : "High inflation as well asincreasing competition for talents necessitate annual salary reviews/ increases. For these we need aregional and international benchmark. But how about star employees rewards? What is a good practice toreward them, in addition to salary review for all others, without jeopardizing the profit margin?" You willfind all 18 answers here, and here is the one I gave - I still go for it 100% :Rewarding performance comes in many different forms and you need to have a comprehensive system inplace.1. Base pay increaseIt covers market movement and maintaining the company’s competitiveness in attracting the righttalents. It can also cover “inflation” (though this approach has a lot of long-term costs linked toexpectations of salary increase even when the company/employee is not necessarily doing well).Hence there is the need to benchmark to market, and define clearly the position that fits your company’sstrategy : to pay below, at or above market. Each approach has its merits and disadvantages.Base pay increase can also come as recognition for past performance combined with appreciation forfuture potential, in the form of promotion. But in general, I don’t believe that base pay increase shouldreward solely the performance related to achieving the year’s objectives.2. PLUS BonusIf you decide to pay one, especially to reward your star performers, there are a number of things that areto be considered.A discretionary bonus may give the manager a feeling of control over the team members because he/shedecides the payment, yet in reality this does not foster performance or collaboration. The truth is, peopleneed line of sight : they need to understand how their actions can influence the company results /performance.It is also important to have a least a good part of the objectives quantified and clarified at thebeginning of the performance evaluation cycle so that there is a clear alignment between the company’sobjectives and what employees will strive to achieve. page 9 / 28
  10. 10. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comThen, describing how this will translate into a financial reward for the employees is also important.And finally, you need to ensure that the evaluation process is fair, so that the payments are perceived aequitable, and you need to communicate thoroughly.A bonus should never be considered a diminution of profit or a risk for your profit margin. A goodrewards system will be designed to take into account its related costs from the onset, therefore adaptingthe simulations to include both fixed and variable personnel costs (this means you need to have theproper HRIS and financial systems in place for cost simulations).You can design systems where the pool of money to be distributed is linked to the profit, and thereafterdistributed on the basis of individual or team performance so that your stars, even in a period of economicduress, are still rewarded – otherwise, as soon as the economy picks up, you will see a brain drain…3. PLUS Recognition systemsYou can implement other elements that will allow you to reward “on the spot” when great results areachieved, whether at the individual or team level. This goes from the simple, free stuff just like saying“thank you and congratulations” in private or in public, to full-scale stock option awards, through one-offpayments or gift vouchers etc….The most important element there is being able to react quickly and not wait until the end of the year… atwhich point it is too late for the recognition to have its expected motivational / morale boost effect.Enjoyed this post ? Why don’t you subscribe by email to make sure you receive my articles 3 times perweek ?Related posts : What to consider for salary planning ? How to decide how many promotions to grant each year The best order in which to apply salary increases in any organisation How do you link performance management and a performance-driven culture ? _______________________________________________ page 10 / 28
  11. 11. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comWhy am I not on the Sales Incentive Plan ? I was working in the IT industry, there was a lot of talk about the sales population. Obviously, theirsuccess was central to that of the organisation, and given the complexity of the products and solutions, thescale of some of the contracts, and the competition in the marketplace, my employers were looking atevery angle when trying to keep the salesforce engaged, motivated and performing.All sections of HR were involved, and Compensation & Benefits played its part obviously. We werechecking many elements, from the types of objectives to be set to the calculation mechanisms and theconsistency of the payment cycle with the sales cycle. Given the high ratios of variable pay to fixed payin the industry, and the also high multipliers in case of overachievement, the potential total pay wassignificantly higher than the guaranteed, monthly pay.So one of the most regular topics of discussion was : " Who should be eligible to the Sales Incentive Plan?". Many parts of the organisation were trying to be enrolled in the SIP, or at least to a "light" version of itwhere the on-target bonus was higher than the regular, corporate bonus. Marketing, pre-sales support,on-site/maintenance ntechnicians, phone and internet customer service reps, even sometimes the Financeteam in charge of calculating the quota achievement.... They all, at some point, tried and/or managed toget enrolled in some form of SIP.The criteria we used were simple yet effective : Look at the specific role not the whole job family and ensure the job description has been vetted by the top management Is the role directly responsible for generating revenue (closing sales contracts) ? Is the role the main decision-maker in the sales negotiation cycle with the client ? What is the % of time spent by the role on revenue-generating activities ? Can we track or measure the revenue generated by theat specific role ?Put together in some form of decision-tree, the answers to these questions helped us determine whetherthe role was considered a direct or indirect sales position (or not at all), and the ratio of fixed and variablepay. It allowed us to decide whether Product Marketing, for instance, would be eligible to some form ofsales incentive. In some companies yes, in some companies no. It depends on your structure, strategy andculture.Whenever you design an incentive, putting in place some criteria to determine eligibility will help you notonly design the incentive, but also communicate about it, and maintain control about who gets what. Tryto also discuss these criteria with other constituents as you may get some very relevant feedback, and willalso come out with some ideas of the questions that employees and managers will ask... and the answersyou can give them. page 11 / 28
  12. 12. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comLiked this post ? Why don’t you share it on LinkedIn or Facebook ? Simply click on the link below andhelp your friends and connections benefit from it too !Related post :Analyse my SIP ! _______________________________________________ page 12 / 28
  13. 13. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comOf average salaries in Europe while ago, a Sales Director asked for "an average salary for a sales/account manager in IT companyselling specialty software within Europe".I wish it were that simple but there is no such thing as a "salary in Europe". For the same job, eachcountry will pay different salaries. Salaries are normally always expressed as gross salary ie before social security deductions (healthcare,pension, long-term disability, unemployment insurance...) and tax deductions. Depending on the country,income taxes are deducted directly through the payslip (eg UK) or are submitted individually by theemployee (eg France). If you get some numbers in reply to this kind of question, I advise you to check the reliability of thesource. Best to get info from survey providers... but usually this info is only available to the companieswho participate in their (paying) compensation survey. And if the source is reliable, then you will have totake into account cost-of-living differences in order to estimate what spending power this would give youcompared to salaries in your current country of work. As far as variable pay, you should consider not the value of the bonus (ie the actual pay... but it is linkedto individual performance in sales positions) but the amount of the on-target bonus ie which amount or %of salary does this sales/account manager receive if he/she reaches all targets at 100%. Variable pay will depend a lot on how the company is structured : is it through account "ownership" orthrough the management of all accounts within a specific geography or by type of customer (eg : bycompany size or industry)... It will also depend on whether the job is held by an individual contributor orby a team leader / people manager. Hopefully this bit of methodology will help you navigate through any data you receive to this widequestion, if you ever get any.Enjoyed this post ? Why don’t you subscribe by email to make sure you receive my articles 3 times perweek ? _______________________________________________ page 13 / 28
  14. 14. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comIs pay the main component of employee engagement at Fortune100 Best Places to Work For ? week, Fortune published its famed annual ranking of 100 Best Places to Work For with thisintroductory comment :"Fat paychecks, sweet perks, fun colleagues, and over 70,000 jobs ready to be filled -- these employersoffer dream workplaces. Like Google, which reclaims the top spot this year to become a three-timechampion."Here is the top 5 list of Best Places toWork For in 2012 in the US : 1. Google 2. Boston Consuting Group 3. SAS Institute 4. Wegmans Food Markets 5. Edward JonesIt is interesting to note that 4 of them are in trendy high tech / professional services firms, with only onein the retail industry (and family-owned, too).Google is famous for its perks : the free food, extensive fitness equipment and parks, unconventionalworking environment (the latest craze is the made-to-measure standing desks), massages has a very relevant article on the topic, trying to ascertain whether the focus onemployee well-being makes the company successful, or whether it is possible to focus on this well-beingthanks to the company success. Classic chicken and egg debate :-).One comment they add is :But thats not to say Google, despite all the workplace benefits, is nirvana. It can be a pressurized placeto work, even with micro-kitchens stocked with free food."Its not about bringing these perks to work, and you work a 40-hour week" at Google, said Charlene Li,founder of Altimeter Group. "Its that you have all these perks that enable you to work much more than 40hours a week."It is very true. Years ago, I was a Compensation consultant for Microsoft, covering the EMEA region.The pay was nice, the benefits were excellent, and the location was nice too. In every major country ofoperation, being in the top 10 Best Places nationally was one of the major annual goals of the HRDirector, as well as of the Country General Manager. Thats how seriously this was for the company. page 14 / 28
  15. 15. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comWhat better way could there be to make the organisation focus on the well-being of its employees throughholistic, comprehensive approaches that were supported by the top management ? The results were great.Working there was truly a transformative experience, for the working conditions, for the quality of thepeople working around you, for the exciting and challenging, make-you-grow assignments... and yes, forthe pay and benefits too, even though they were not the main driver for the motivation and engagementthat most of us felt every day.Why did the company do that ? Well, there really was a philosophy of caring for the employees. But atthe same time, we all had access to the offices 24/7. We were expected to deliver results, no matter howmuch time it took. I regularly finished at 11pm and worked at weekends. Yet I never resented it, it waspart of the "deal", a compromise made in exchange for being in such a stimulating environment, feeling Iwas making a difference to the lives of my coworkers.So yes, the great Places to Work For offer a superb environment. They offer stimulating work with smartand interesting colleagues. They offer "fat pay checks" and "sweet perks". But as I have experienced, thelatter are not what makes people engaged and motivated there.So next time your top management tells you to increase pay or allowances, or provide better healthcare ina bid to reduce attrition and improve productivity, well... go for it - but make sure to point out thatintegrated approaches focusing on the total employee experience will make a bigger difference. Look foryour overall Employee Value Proposition, building a culture of trust and openness, and providingchallenges and growth opportunities.... And by the way, dont forget to check the 12 unusual perks listed from the Top 100 list - some funideas in there !Liked this post ? Why don’t you share it on LinkedIn or Facebook ? Simply click on the link below andhelp your friends and connections benefit from it too !Related posts :Remuneration, engagement and the GCC employee _______________________________________________ page 15 / 28
  16. 16. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comRemuneration, engagement and the GCC employee reports have drawn attention to the fact that remuneration is not the main motivator forGCC-based employees.The Qudrat TM Research results were recently released by Aon Hewitt and highlight that NationalQataris are the most highly engaged local Nationals in the GCC, irrespective of their gender.Regarding issues often mentioned by companies regarding the challenges of the private sector in the Gulfto attract the national workforce due to high pay in government jobs, the survey results underline thefollowing advantages :"Private sector organisations enjoy higher levels of engagement and need to learn to leverage theirnon-monetary competitive advantages over the public sector when recruiting nationals. In response towhat is important to them at work, GCC nationals rate career growth, learning and development, and aclear HR policy above remuneration."Meanwhile, produced another survey describing higher levels of employee engagement in theregion, based on a larger population sample as well as a wider geographic representation.What is interesting though is to see some similar results from the survey regarding what makes employeesfeel engaged :"44.7% of employees claim that first and foremost, more opportunities to learn and grow within thecompany are needed to make them feel more engaged. A better salary and benefits package comes in as adistant second with 17.1% placing it as a priority; trailing behind is a clear career path (13.7%); a goodrelationship with colleagues (9.1%); and a good relationship with their manager or supervisor (8.6%).Only 6.8% believe that more recognition or appreciation will increase their level of engagement atwork."So in that survey again, we see that remuneration is not the main driver of employee engagement.A direct consequence is that companies, especially in the private sector, should not focus their effortsonly on their Compensation & Benefits programs in order to improve employee engagement.Motivation is complex and organisations need to take a holistic approach in order to provide anenvironment that will encourage the discrete efforts that employees can produce and that eventually leadto better company results.Yes, rewards, recognition and performance management are a part of the equation that cant be ignored.And they play a role in reaching emiratisation and nationalisation targets for organisations. But the lessonfrom these surveys is that you must always anchor them in more complete HR and managerial approachesto the improvement of employee morale and motivation. page 16 / 28
  17. 17. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comSo try to think of how your organisation is approaching employee engagement, and please feel free toshare your experience of what worked best (or didnt) at your current or past company in the commentssection !Enjoyed this post ? Why don’t you subscribe by email to make sure you receive my articles 3 times perweek ?Related posts : Emiratisation and Compensation & Benefits - part I Emiratisation and Compensation & Benefits - part II The UAE 40th National Day and the Compensation manager _______________________________________________ page 17 / 28
  18. 18. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comThe limits of Emiratisation quotas company has set some ambitious targets around emiratisation / nationalisation. Youve been a goodCompensation manager. You have integrated Emiratisation into the bonus calculations for yourorganisation. The idea was : "If its in their objectives, then the Directors will focus on it".So you sat with the HR Director and the CFO and offered to link part of the Directors bonus to theachievement of a certain quota of Emiratis in the headcount of their Division. Of course, you did notapproach it roughly with a blanket number, identical for all, like "x% of Emiratis in the headocunt byyear-end".No, you did your homework, took into account the percentage of Nationals present in each Division at thebeginning of the year, and set an improvement target unique to each organisation, that when compiled,builds up to your overall target quota.Then you included that in the overall Division or Director target (or both, depending whether your bonussystem includes a collective component or not), gave it a weight or priority, and let the system go on asusual for the rest of the objectives.You did your job, right ? Ensured that an Emiratisation corporate goal has been cascaded in theorganisation, while allowing for objective, realistic differences between the Divisions.Well, I think its a first step - but a lot more could be done.What are the traps of this approach of emiratisation through compensation ?The first one is that a purely quantitative approach, while easy to define and track, is important but can beeasily misleading. It does not give you any background on the human aspects of your emiratisationstrategy. Are you hiring the right Emiratis, the ones with the skills sets that are necessary to yourcompany success ? The ones that go the extra mile, adhere to your values, want to learn and have a realfuture in your organisation ?The second trap is that, once you set targets in each Division, you run a risk of totally stopping internalmobility of Nationals in your company. In effect, why would any Director allow one of her Nationals tomove to another Division ? If she is not able to replace that person by another Emirati, then she will bepenalised for having "lost" on emiratisation, while the receiving Director will be seen as having improvedon emiratisation.Yet in the end the company is not winning anything as there is no additional headcount of Nationals inthe organisation. And you end up with one unsatisfied Director and one being rewarded for somethingwhich is not really what the company was trying to achieve. Eventually, this kind of rigid,mathematical-only approach will lead to reduced career growth opportunities for the very population thatyou are trying to focus on, the Nationals. page 18 / 28
  19. 19. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comSo what should you do ? On the quota target, one simple element is to discount the "winning" or "losing"of UAE Nationals due to internal mobility in the statistics you use. This way, you neutralise the potentialnegative effects on the development of your Emirati population.Most importantly, when thinking about incentivising your company on emiratisation-related targets, try tocombine quantitative and qualitative targets. The latter will help you drive the focus where it really needsto be, and where the value creation really lies.So what kind of criteria do you use to link your compensation policies to nationalisation targets in yourcompany ? Please share your best practices in the comments section !Related posts : GCC Nationals pay : a lesson from the Y2K bug Remuneration, engagement and the GCC employee Emiratisation and Compensation & Benefits - part I Emiratisation and Compensation & Benefits - part II _______________________________________________ page 19 / 28
  20. 20. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comGCC Nationals pay : a lesson from the Y2K bug the big scare of the so-called "Y2K bug" ?Back at the end of the Nineties, the world started to realise that a lot of computer programs had beenwritten with dates expressed "55" or "87" instead of "1955" and "1987". As year 2000 was approachingfast and therefore dates would become "00" ie a number less than the previous year at 99, there was realconcern that the programs running electricity plants, the internet, the distribution of gas and water etc, allwould fail and mankind would return, at least for a while, to pre-industrial ages. People started to pile upon emergency stock, food, water, electrogen groups, and taking survival courses."What does that have to do with Compensation & Benefits ?", you say ?Well, from the second half of 1998 to the end of 1999, all of a sudden, the salaries of IT engineers wouldcould fix these programs went through the roof. Companies had been aware of the problem for a longtime but a lot of them had procrastinated, and at once, everybody wanted these engineers and there werenot enough of them to satisfy the demand for their skills and services. As a consequence, the balance ofpower shifted to them in the labour market, and they were able to command greatly increased salaries forthe same job they were doing a few months before.So how do you manage that situation as a Compensation manager ?Grade Minimum of Midpoint of Maximum of salary range salary range salary rangeGrade 8 16,000 18,000 20,000Grade 7 12,000 14,000 16,000Grade 6 10,000 11,000 12,000The IT engineer in grade 6 who had a basic pay aligned with market at 11,000 is now worth 17,000,which corresponds to a salary of a grade 8, two grades above in the jobs hierarchy. Managers aredesperate trying to get the engineers on board, but your internal policies prevent you from hiring abovethe maximum of the job salary range.You basically have 2 solutions :1 - Hire in the apparent grade of the job as driven by its current market value. You now have new ITengineers in grade 8, despite having a job that should be in grade 6 in terms of job evaluation - creatingimbalance in your job families as the IT engineers can end up being in a higher grade than their managers.Your current IT engineers are in grade 6 and demanding to be promoted to the new grade, and there is arisk of grade inflation along all your IT jobs as managers also demand to be promoted so that they areabove their employees in the hierarchy. You have spiralling costs in that whole job family, alsoconsidering that allowances and benefits are paid 2 grades too high. page 20 / 28
  21. 21. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comOr, if you dont grant the demands of the existing IT engineers and their managers, you will end up at bestwith them being highly disengaged core employees, or at worst you will loose them all and your criticalsystems update will fail and the company will not be able to function any longer.2 - Alternatively, hire the IT engineers in grade 5 with a basic pay of 11,000 (core job value) + 6,000 ashot skills or market premium. Make this premium clearly temporary and subject to regular revision up ordown based on market conditions in the contract of the engineers you hire. Extend the same premium,with the same conditions, to your in-house engineers. You have some cost increase, but it is under controlas it is time-conditioned. And there is no job grading inflation in your organisation.In the past, many organisations in the GCC have opted for the first solution. They hired employees inover-graded roles. This happened for example during the real estate boom in the UAE, where projectmanagers, service delivery managers and other real estate and construction experts received packages thatwere made of allowances and benefits that were higher than the actual job responsibilities should havecommanded as per a normal job evaluation exercise.Then, when the global crisis hit the country, these people became too expensive and had to be maderedundant. Maybe if they had been paid on a normal basic + hot skills premium, this drastic decisioncould have been spared, at least for a few of them.Today, some organisations face a somewhat similar challenge when recruiting local Nationals. TheNationals demand and command higher salaries than their expatriate peers. In most private companies,the Nationals are not put in higher grades than the job requires, but their basic pay is significantly higherthan that of their expat colleagues (as well as some of their allowances).I would challenge companies to adopt the hot skills approach, pay a "normal" basic for Nationals andgrant them a nationality premium.Even if you cant do that because of the potential impact on their pensions, you can definitelycommunicate that their basic is calculated based on 2 components. This will help educate them and settheir expectations as to what their pay would be irrespective of their nationality, and that one day ifmarket conditions change, this is what they would receive as a package.What do you say ? Is this something that you could consider introducing for your organisation ? How doyou think this would be received by the Nationals as well as by management ? Please share your thoughtsin the comments section !Related posts :Emiratisation and Compensation & Benefits - part IEmiratisation and Compensation & Benefits - part IIThe UAE 40th National Day and the Compensation manager page 21 / 28
  22. 22. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comRemuneration, engagement and the GCC employee _______________________________________________ page 22 / 28
  23. 23. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comCreate the best rules in Outlook to boost your productivity of the year, we all come back full of good intentions. In todays Sunday Skills, I want to showyou how to easily set up rules to manage the inflow to your Outlook inbox.The steps are very simple and explained in this presentation :What matters really, is how you can use these rules to help you manage your compensation work.So let me share some examples : 1. Assign your boss emails to a high priority category with a flag for follow-up when you are in to To, not cc: line of the message. 2. Automatically delete meeting acceptance and refusal messages when you organise meetings (you can also get into the event itself and track attendance). 3. Move messages sent to the HR distribution list to a specific "communications" folder 4. Send RSS feeds to a special "reading" folder to catch up upon at a later date 5. File messages from your team member about a specific project (eg : "compensation survey", "Oracle update", "LTIP" is in the header or subject) where your name is in the To line as these are probably for information only. You can even make an exception if the word "help", "advice" or "support" is mentioned in the text or subject line and flag these messages for action to keep them in your inbox for special review. Any message from anyone else with the same subject will still show up in your inbox, allowing you to check them when they get in.Now get your imagination running and get your inbox organised !Enjoyed this post ? Why don’t you subscribe by email to make sure you receive my articles 3 times perweek ?Related posts : How RSS Feeds and News Readers can help Compensation & Benefits 4 skills to master for influential Compensation and Benefits _______________________________________________ page 23 / 28
  24. 24. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comGet laser-focused Compensation information with Alerts todays edition of Sunday Skills, I want to complement a recent post I made about RSS and howsubscribing to different blogs, online newspapers / magazines and other websites can help aCompensation manager maintain their skills and industry knowledge - for free, in a just a few minutes perday.Google Alerts complement your subscription to certain feeds. With Alerts, you dont receive info basedon the source of the news, you receive info based on the specific content you are interested in. Youreceive this content every day, as it shows up on the net, or once a week, either direct to your inbox or inyour Reader.This very powerful as you can monitor multiple things, for example : Any news article related to your competitors if you are a Compensation consultant Blog posts pertaining to a topic you want to increase your knowledge of, for example if you work on a certain project Monitoring a news story of interest to you (for example, I used an Alert to follow-up on the Zynga stock scandal a little while back) Tracking comments about a product you are considering buying etc...Alerts are technically easy to create, as you can see in the quick presentation below :Of course, the first alert you should create is one about yourself (your name, your company name ifrelevant) and it should cover all types of information. You want to know if someone is using your name,in good or in bad, so that you can react if needed.Then, you need to be a bit creative in order to get the most relevant results for your needs. If you are likeme, at first you will probably be a bit too vague and you will receive tons of irrelevant information, withone nugget here and there.Dont give up, simply work on refining your query and alert so that you get to what you really want toknow about. It is better to receive fewer but well targeted alerts, than too many results - unless you likesifting through mud in order to find your gold !Here is one example. Imagine you are interested in receiving information about legislation on minimumwages in country ABC, the Alert could be something like :((New OR recent) AND (law OR decree OR legislation) AND ABC AND ("minimum wages" OR"minimum salary" OR "minimum income" OR "minimum pay") page 24 / 28
  25. 25. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comUnless the country is adopting new legislation on this topic and there is a lot of commenting about it, itwont return results every day. But the results will be the ones that are useful to you.In short, creating Alerts allows you to receive the information you need as it comes up on the web, evenfrom sources and places you have never heard of. It focuses on content you are interested in, versusgetting (indiscriminately) all the information from the sources that you like as per your Reader RSSsubscriptions.What about you ? Do you use Alerts ? Do you have tips you want to share in the Comments section ?Enjoyed this post ? Why don’t you subscribe by email to make sure you receive my articles 3 times perweek ?Related posts : How RSS feeds and News Readers can help Compensation & Benefits Create the best rules in Outlook to boost your productivity _______________________________________________ page 25 / 28
  26. 26. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - http://compensationinsider.comShare the knowledge - January 2012 every month, here are some of the best or most relevant Compensation & Benefits,performance management, HR and/or global mobility articles that I came across recently : Dave Ulrichs ebook for HR Magazine (free download) looks into "What is Leadership ?", another must-read from the most influential HR thinker. Also from him and his partners, a preview of the results of the survey they conduct regularly, defining the 6 core competencies for HR professionals to be personally effective and have an impact on business performance, as explained in HR Magazine (look for the January edition to see these results in full) … and here is another analysis of these results. A blog post article written at Huffington Post by a US teacher on teachers compensation. Very interesting to see how what looks like great compensation from the outside (short working hours, long holidays, great benefits and fair pay) is actually not perceived so well from the inside due to the lack of pay for performance and no recognition of the impact of each teacher individually. Replace teacher by "civil servant" or "government employee" and you have a classic article on the shortcomings of tenure based pay progression. An interesting article on why profit-sharing can be perceived as an entitlement, which is not what a bonus is about as it is supposed to reward extra effort and not be expected. This article (in French) resonates with my recent post commenting on the High Pay commission recommendations in the UK. It touches on high pay from a public expense standpoint and argues for a better distribution of total wages (read : less differential between average and highest pay in companies). Beyond taxation as a means to redistribute wealth, they argue against the "closed circle" of remuneration committees deciding Directors pay and often being composed of members who cumulate board memberships : they propose to have the General Shareholder Meeting vote on Exec pay, and to limit the number of Boards one can be a member of at the same time. They also propose more long-term compensation as well as closing certain fiscal advantages. Whether we agree with the specifics or not (some of these proposals are very specific to France), it is interesting to note that 2 independent commissions in France tend to propose some similar ideas regarding high executive pay. I would not be surprised if this European legislation were passed in that direction in the coming years… Total distributes some of the largest salary increase budgets in France, boosted by record profits… yet sometimes numbers arent always what they seem, as some of the comments (clearly written by people privy of the situation) highlight. Article in French.For those of you who are interested in GCC and MENA articles, here are some regional pieces : A contract is a contract and a company is bound by it - I am glad that UAE courts maintain this principle alive and kicking : UAE firms wising up to retirement acounts page 26 / 28
  27. 27. Compensation Insider - January 2012 postsCompensation and Benefits with a Middle East flair - Abu Dhabi will bear the cost of the pension hike to AED 10,000 for former federal employees and military : Some details of who will be impacted by the salary increases announced for federal government employees on the UAE 40th National Day: UAE manufacturing workers’ wages among lowest in the world. Average worker wage is $3.38 against $45.5 in Norway – the highest. Talent shortage threatens Gulf retail banking expansion Prospects for salary increases brighten in the Middle East An analysis of the main benefits of being an expat with a particular slant on the Middle East, through the Expat Economics table from the HSBC Expat Explorer Survey 2011 which was published recently. The Council of Ministers has approved the Unified System for the Extension of Insurance Protection for all Gulf Cooperation Council (GCC) citizens working in Saudi Arabia. The system provides pension coverage for GCC citizens in all member states. Saudi unemployment benefits may hinder Nitiqat scheme 6,000 health graduates refuse to work in the private sector - KSA Egypt increases social insurance pension plansBest of the rest : Say on Pay leading to better compensation communication - Comments from the SEC Chairman. An interesting example of representation of employees in the remuneration committee at John Lewis. The British government has announced plans to help control and understand executive pay. The measures focus on four key areas: greater transparency; increased shareholder power; more diverse boards and remuneration committees; and best practice led by the business and investor community. Reactions have been varied, from institutional investors welcoming them to Unions finding them rather "underwhelming" In Incentives may not trump culture over at i2i (one of my favorite blogs), Paul Hebert argues that if we want to change a culture, we could be "better off, over time, recognizing and rewarding behaviors than trying to motivate them". I really encourage you to read this thought-provoking article on culture, change, reward and recognition.... And this month I would like to give you a special : a fascinating review of one of the most famousspeeches of all times, "I have a dream" by Martin Luther King. Nancy Duarte skillfully analyses thedifferent parts and rhythms of the speech in a short video (less than 8 minutes) and calls for everyone tobecome great communicators. Or at least listen to Dr King again…. _______________________________________________ page 27 / 28
  28. 28. Compensation Insider - January 2012 posts Compensation and Benefits with a Middle East flair - Compensation and Benefits with a Middle East flair PDF generated February 01, 2012 at 3:45 PM by Kalins PDF Creation Station WordPress plugin page 28 / 28Powered by TCPDF (