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Compensation as a Strategic Tool


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Compensation as a Strategic Tool
in Talent Management

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Compensation as a Strategic Tool

  1. 1. National HRD Network Compensation as a Strategic Tool  in Talent Management  in Talent Management
  2. 2. Meet the Speaker Bimal Rath is Head HR for Nokia in South Asia. He has previously worked for organizations like the Tata Group and British Telecom in senior HR roles, spanning across HR Strategy, HR service delivery, Joint Venture relationship management and specialist HR areas. His professional interest areas are in Compensation and Benefits, Organizational Design and Leadership development. Bimal has been involved actively in HR associations like National HRD Network. He also takes time off to teach in renowned management schools.
  3. 3. Managing Talent Talent Pipeline: an ‘organizationally facilitated’ pipeline of talent that consciously focuses on providing developmental and growth inputs to key talent in order to create a pool of leaders Talent Productivity = Entry – (Organizational Filters + Employee choices) Level Resourcing Filters (internal) Development Retention • Talent Reviews • Entry level hiring • Mobility / language • Individual Dev plans Junior • Opportunities for • Individual aspiration (via • Rotations and Short Talent assignments dev dialogue) assignments P • Functional Competencies • Leadership programs • Better than peer compensation R • Lateral recruitments • Talent Reviews • Development Centers • Opportunities for • Selection framework • Mobility / language • Cross functional / geo rotation assignments O to assess long-term • Individual aspiration (via • Coaching / mentoring • Savings C fit with strategic direction Dev dialogue) • Leadership training • Lifestyle compensation • Leadership competence • MTIP/LTIP E S • Lateral recruitments • Talent Review • Development Centers • Mobility / language • Lifestyle compensation S • Selection framework • Individual aspiration (via • • Cross functional / geo rotation Coaching / mentoring program • Recognition Senior to assess long-term Dev dialogue) g ) • Leadership experiences • Long term savings Talent fit with strategic ith t t i • Functional Competencies • Retirement savings direction • Cross-geo experience Employe Integrate: Attraction This can be add e sees •C&B / devt needs right on to reward framework C&B compensation ti vs effort •Recognition strategy 3 © 2005  Nokia  V1‐Filename.ppt  / yyyy‐mm‐dd / Initials
  4. 4. Some practical issues Some practical issues •Is attraction supported by market competitive compensation ? •Is mobility seen as financially attractive? Particularly international? •Do people feel that they have enough choices of lifestyle based on compensation levels and practices? •Can employees build assets? •Is their own and family’s future somewhat secure? •What is seen as fair and equitable how is it communicated? What equitable—how •How does an employee feel if he stays long enough in an organisation—well rewarded, a little shortchanged or having lost an opportunity to save and earn? •Is there a good connect b I h d between the organisation culture, and l d hi h i i l d leadership walk the talk, particularly on compensation? 4 © 2005  Nokia  V1‐Filename.ppt  / yyyy‐mm‐dd / Initials
  5. 5. Meet the Speaker P. Senthil Kumar is Director – Human Resources and Administration for Cairn India. He is responsible for strategic decision making in the areas of HR policy, compensation planning, recruitment and performance management in the organisation. Senthil holds a Post Graduate in Personnel Management and Industrial Relations from Xavier Labour Relations Institute (XLRI), Jamshedpur and a Bachelor’s degree in Technology (Chemical Engineering). In a career spanning more than 23 years, he has made significant contributions as a Human Resource (HR) professional.
  6. 6. Compensation as a Strategic Tool in Talent Management P Senthil Kumar- Director-HR & Administration
  7. 7. Not Compensation but Rewards 'Compensation', it's a quite a conservative approach and also has a negative connotation in itself! ‘ Reward’, A Progressive and positive approach to fair Employee Remuneration
  8. 8. Cairn India – 2007 Total Rewards Complete Package termed “Total Rewards includes: Total Rewards” Salary Benefits
  9. 9. Cairn India – 2007 Total Rewards CONTD. Recognition Quality of Work Life
  10. 10. Cairn India – 2007 Wealth Creation Career Growth Personal Development Opportunities p pp
  11. 11. Rewards to an Organisation g Link Rewards to an Organization's 4 main life cycle stages : Growth Stabilization Maturity and Decline irrespective of what Sector or Industry one operates in . The Reward Levels is always Benchmarked to the right 'Marketplace Salaries' and not just 'Internal Measures'.
  12. 12. Reward Mix Growth Stage( Startup Companies) Reward Mix should be on : g ( p p ) High on cash components Substantial in Benefits Low Variable pay (STI/MTI) None on wealth creation (LTI/Stock Options) Stabilization Stage : Lesser cash component More on Benefits Higher on variable Pay Bit of wealth creation
  13. 13. Cairn India – 2007 Reward Mix CONTD. Maturity Stage: Focus on consolidation of the Benefits Quite High onus upon variable pay Adequate wealth creation Decline Stage : Cash C h component get F t t Frozen Focus on wealth creation comes down Benefits get stabilized Very high variable pay mix
  14. 14. Cairn India – 2007 Healthy Reward Philosophy y p y A healthy Reward philosophy is always based on a right blend of : 'Pay for Role' through Fixed Salaries 'Pay for Performance' via Variable Pays
  15. 15. Cairn India – 2007 Healthy Reward Philosophy y p y CONTD. 'Pay for Skills' by way of Skill Allowance premiums y y y p Focus on total value propositions
  16. 16. Cairn India – 2007 Differentiate the Talent Pool Differentiate the ‘Talent Pool’ & create variable Reward strategies , keeping ‘ Different Strokes for Different Folks’.
  17. 17. Cairn India – 2007 Rewarding Employee…NO NO…? g p y Rewarding Employee on the following basis are strictly No, g p y g y No, No, in today’s Market scenarios : Personality Factors Halo Effects Recency Impacts
  18. 18. Thanks Thank you for your participation For Question & Feedback For Question & Feedback  please email at