The changing face of reward examines how the business drivers of reward are changing due to the impact of the global downturn and other macroeconomic trends in the global economy.
Human Capital (September 2010) Reap What You Sow-ROI On RewardSimran Oberoi
1) Measuring return on investment (ROI) for reward programs is important for companies to maximize their reward spending and ensure it aligns with business objectives. Key aspects that impact ROI include variable pay, benefits, differentiated rewards for top performers, and performance metrics.
2) To properly measure ROI, companies must define investment as total remuneration costs and benchmark outcomes against business goals. They should also examine performance metrics and ensure a balance of financial and non-financial metrics are used.
3) Engaging and enabling top talent is critical for companies to achieve higher ROI. Companies that engage and enable employees outperform peers on financial metrics. Changing systems and processes to remove barriers is important to allow employees to succeed.
Who is increasingly instrumental in helping CEOs and Boards make high-impact decisions – the choices and trade-offs that build or destroy enterprise value? CFOs.
Based on input from more than 1,900 CFOs and senior Finance leaders worldwide, the IBM Global CFO Study indicates that the demands on CFOs are rising and extend well beyond traditional financial control and supervision.
But in a constantly changing environment, how can CFOs provide their enterprises with a competitive edge? How can they help the business make not just faster but smarter decisions?
In the 2010 study, one group of Finance organizations – called Value Integrators – consistently outperforms their peers. They are not only more effective, but their enterprises also perform better financially.
Their secret? Driving a combination of two key capabilities – Finance efficiency and business insight – across their organizations. Although study results show that each capability provides important benefits, the highest performers excel at both.
Read the study to learn more about this multiplier effect and how to create it within your own organization.
Results of a survey I participated in at the beginning of the year around business improvement groups. An opportunity to break away from the competition during hard times !
This document provides an overview of Riskpro India, a risk management consulting firm with offices in New Delhi, Mumbai, and Bangalore. It details Riskpro's mission to provide integrated risk management solutions to mid-large sized corporates and financial institutions in India. The document outlines Riskpro's value propositions including affordable services delivered by skilled professionals. It also summarizes Riskpro's service offerings such as Basel compliance advisory, corporate risk advisory, IT risk advisory, and corporate restructuring advisory.
This document provides an overview of compensation and benefits/reward management. It defines reward management and discusses its objectives, which include aligning rewards with business strategy and driving desired behaviors. It also covers the dimensions and determinants of a reward strategy, including external market factors, internal job factors, and individual performance. Finally, it discusses trends in reward management, like a shift toward contingent, variable pay linked to business needs rather than seniority. The overall summary is that the document outlines the key components and considerations in developing an effective organizational reward strategy.
This document provides an overview of compensation and benefits/reward management. It discusses key topics such as the definition and objectives of reward management, the theoretical context of rewards, dimensions and determinants of reward strategies, traditional versus new pay philosophies, and debates around best practice versus best fit approaches. The summary highlights the strategic focus of modern reward management and its link to business objectives.
Welsh Consultants publishes- Many firms today face with organizational declines at some point in their life cycles because of both external and internal factors. Most often organizations enter the state of decline when they fail to anticipate, recognize and adapt to external and internal pressures that threaten the organization’s existence. As one of the important factors leading firms to decline, crises represent a significant threat to firms’ high priority values and demand a time-pressured response. As an alternative response to the times of crisis, operating turnaround strategies are targeted to enhance a firm’schances of ending the threat and achieving sustainable performance recovery. Operating turnaround strategies can be defined as the set of consequential, directive decisions and actions aiming to reverse a declining business as quickly as possible through asset reduction, cost cutbacks and revenue generating The conceptual scope of this article is determined as examining operating turnaround strategy and its variants in a theoretical frame by reviewing literature. Author, Founder- Manish P
Human Capital (September 2010) Reap What You Sow-ROI On RewardSimran Oberoi
1) Measuring return on investment (ROI) for reward programs is important for companies to maximize their reward spending and ensure it aligns with business objectives. Key aspects that impact ROI include variable pay, benefits, differentiated rewards for top performers, and performance metrics.
2) To properly measure ROI, companies must define investment as total remuneration costs and benchmark outcomes against business goals. They should also examine performance metrics and ensure a balance of financial and non-financial metrics are used.
3) Engaging and enabling top talent is critical for companies to achieve higher ROI. Companies that engage and enable employees outperform peers on financial metrics. Changing systems and processes to remove barriers is important to allow employees to succeed.
Who is increasingly instrumental in helping CEOs and Boards make high-impact decisions – the choices and trade-offs that build or destroy enterprise value? CFOs.
Based on input from more than 1,900 CFOs and senior Finance leaders worldwide, the IBM Global CFO Study indicates that the demands on CFOs are rising and extend well beyond traditional financial control and supervision.
But in a constantly changing environment, how can CFOs provide their enterprises with a competitive edge? How can they help the business make not just faster but smarter decisions?
In the 2010 study, one group of Finance organizations – called Value Integrators – consistently outperforms their peers. They are not only more effective, but their enterprises also perform better financially.
Their secret? Driving a combination of two key capabilities – Finance efficiency and business insight – across their organizations. Although study results show that each capability provides important benefits, the highest performers excel at both.
Read the study to learn more about this multiplier effect and how to create it within your own organization.
Results of a survey I participated in at the beginning of the year around business improvement groups. An opportunity to break away from the competition during hard times !
This document provides an overview of Riskpro India, a risk management consulting firm with offices in New Delhi, Mumbai, and Bangalore. It details Riskpro's mission to provide integrated risk management solutions to mid-large sized corporates and financial institutions in India. The document outlines Riskpro's value propositions including affordable services delivered by skilled professionals. It also summarizes Riskpro's service offerings such as Basel compliance advisory, corporate risk advisory, IT risk advisory, and corporate restructuring advisory.
This document provides an overview of compensation and benefits/reward management. It defines reward management and discusses its objectives, which include aligning rewards with business strategy and driving desired behaviors. It also covers the dimensions and determinants of a reward strategy, including external market factors, internal job factors, and individual performance. Finally, it discusses trends in reward management, like a shift toward contingent, variable pay linked to business needs rather than seniority. The overall summary is that the document outlines the key components and considerations in developing an effective organizational reward strategy.
This document provides an overview of compensation and benefits/reward management. It discusses key topics such as the definition and objectives of reward management, the theoretical context of rewards, dimensions and determinants of reward strategies, traditional versus new pay philosophies, and debates around best practice versus best fit approaches. The summary highlights the strategic focus of modern reward management and its link to business objectives.
Welsh Consultants publishes- Many firms today face with organizational declines at some point in their life cycles because of both external and internal factors. Most often organizations enter the state of decline when they fail to anticipate, recognize and adapt to external and internal pressures that threaten the organization’s existence. As one of the important factors leading firms to decline, crises represent a significant threat to firms’ high priority values and demand a time-pressured response. As an alternative response to the times of crisis, operating turnaround strategies are targeted to enhance a firm’schances of ending the threat and achieving sustainable performance recovery. Operating turnaround strategies can be defined as the set of consequential, directive decisions and actions aiming to reverse a declining business as quickly as possible through asset reduction, cost cutbacks and revenue generating The conceptual scope of this article is determined as examining operating turnaround strategy and its variants in a theoretical frame by reviewing literature. Author, Founder- Manish P
The document discusses key concepts related to strategy and strategic management. It defines strategy as a plan or course of action related to pursuing organizational goals and objectives. Strategic management is described as a process directed by top management to determine long-term goals and ensure decisions align the organization with its environment. The strategic management process involves environmental scanning, strategy formulation, implementation, and evaluation.
Corporate strategy and high technology investmentTusara
The document discusses corporate strategy and high-technology investment. It defines corporate strategy as covering the scope and purpose of business, objectives, initiatives, and resources needed to achieve objectives. It also provides an overview of Walmart's highly effective corporate strategy, including its use of cross-docking and inventory management systems. Regarding high-technology investment, the document outlines key features like research, flexibility, proper funding allocation, and strategy formation, as well as limitations such as rapid technological changes, lack of competence, and global competition.
This document discusses various efficiency theories for mergers and acquisitions. It outlines theories such as differential efficiency, inefficient management, synergy, pure diversification, and strategic realignment. It also discusses undervaluation as a factor for M&As. Additionally, it covers agency problems that can arise between managers and shareholders, and how acquisitions can help address these issues. Finally, it outlines the hubris hypothesis, where managers may commit errors of overoptimism when evaluating merger opportunities due to excessive pride.
Stock options have traditionally been used to incentivize mining company executives but are falling out of favor due to concerns about risk. While stock options continue to be useful for junior mining companies with limited cash, regulatory pressure is increasing oversight of executive compensation. To balance risk and reward, companies should consider longer vesting periods, bonus clawbacks, and a mix of short and long-term incentives tied to multiple performance metrics.
1) NGOs need to measure performance both financially and non-financially to align activities with objectives and meet donor accountability. Financial measures include analyzing income sources, expenditures, financial sustainability, efficiency, and effectiveness using ratio analysis and trend analysis.
2) Non-financial measures are also important to assess impact on communities served and progress toward goals. These include tracking changes in skills, relationships, jobs created, and goals achieved over time.
3) An integrated approach to performance measurement using both financial and non-financial metrics provides a balanced view of organizational performance and opportunities for continuous improvement.
FRT - 110530 - BED - Why are some companies luckier than others - Frank LeendersFlevum
This document discusses how companies can transform their risk management approaches to create strategic value. It notes that while companies recognize the need to improve risk governance, many are overspending on risk management and not focusing on the most important risks. The document advocates aligning risk management more closely with business strategies to reduce costs, enhance transparency and improve performance. It outlines a risk performance model that companies can use to strengthen governance, integrate risk functions and measure risk management's impact on business objectives.
Ch 1 2013QUIZ strategic management concepts &cases 11th edition by Fred حمد بوجرادة
This chapter discusses strategic management and planning. It defines strategic management as making cross-functional decisions to achieve organizational objectives. The strategic management process involves formulation, implementation, and evaluation of strategies. Key terms are introduced, like vision, mission, strengths/weaknesses, opportunities/threats. The benefits of strategic management include improved performance, communication, and decision-making. Pitfalls can occur if not properly implemented.
The document discusses mergers and acquisitions (M&As) and related human resource management (HRM) issues. It defines different types of M&As and reasons for companies merging. Major HRM challenges in M&As include communication, training, employee retention, cultural clashes, and resistance to change. Culture differences between merging companies can significantly impact integration efforts if not properly managed. The document provides best practices for strategic planning, due diligence, negotiations and post-acquisition integration to help realize the intended benefits of M&As.
Common Objectives Performance Management System for Not-for-profit and Public...Browne & Mohan
Designing Performance management system for government, public sector and not-for-profit organization is a daunting task. Many of these organizations pursue long-term programs and projects. Alignment of various groups, departments and individuals within each department is the need of the hour. However, many of these organizations suffer from functional silos and focus on financial measures only. Managing for results by directing right staff behaviour and initiative taking is not facilitated. In this paper Browne & Mohan consultants present a common objective approach that could be used to fix accountability, ownership and outcome based behaviour in public sector and non-profit organizations.
How To Develop A Total Compensation Strategynlomas
This document outlines key steps for developing a total compensation strategy, including defining compensation and strategy, making strategic choices, and tailoring compensation systems to business strategy. It discusses assessing total compensation implications, mapping a compensation strategy, and implementing the strategy. The goal is to motivate performance through the right mix of base salary, short and long-term incentives, and benefits.
Strategic leadership involves managing the paradox between managerial and visionary leadership models. Effective strategic leadership determines strategic direction by developing a long-term vision of strategic intent with two parts: core ideology and an envisioned future. It also exploits and maintains core competencies, develops human capital, sustains an effective organizational culture through establishing ethical practices and balanced organizational controls measured by the balanced scorecard framework.
Corporate governance is used to monitor and control managers' strategic decisions by establishing order between a firm's owners and its top-level managers. It became necessary due to the separation of ownership and managerial control in modern corporations. Agency theory holds that conflicts can arise between principals (owners) and agents (managers) if their goals are not properly aligned. Various internal mechanisms like ownership concentration, boards of directors, and executive compensation seek to mitigate these agency problems and ensure managers make decisions that reflect owners' interests.
Quiz 5QUIZ strategic management concepts &cases 11th edition by Fred R. David...حمد بوجرادة
The document provides answers to 15 questions about mission statements and vision statements. It discusses where to find a company's mission statement, how to develop mission and vision statements if they do not already exist, how developing a mission statement can help resolve divergent views among managers, why mission statements should be reexamined when a company is successful, characteristics of good mission statements, and benefits of having clear mission and vision statements.
The document discusses several key internal forces that influence a firm's strategy and performance, including distinctive competencies, organizational culture, and resources. It explains that an internal audit gathers information about the firm's management, marketing, finance, and other operations to help understand how different parts fit together. The Resource-Based View contends that internal resources across physical, human, and organizational categories primarily determine performance if they are rare, difficult to imitate, and not substitutable. The document also reviews several aspects of management, marketing, production/operations, and tools like value chain analysis and benchmarking.
The document summarizes research on factors critical for successful organizational restructuring or reorganization. It identifies six key factors: 1) synchronizing the reorganization design with business strategy; 2) clarifying roles and responsibilities; 3) deploying the right leaders and capabilities; 4) designing the organization layer by layer rather than top-down; 5) minimizing execution risks; and 6) reorganizing during periods of strength rather than distress. Companies that incorporated more of these six factors reported much higher rates of reorganization success.
Quiz 1QUIZ strategic management concepts &cases 11th edition by Fred حمد بوجرادة
Strategic management involves analyzing external and internal factors to formulate strategies, implement plans, and evaluate performance. It is an objective, logical process for making major decisions under uncertainty. Effective strategic management requires understanding competitors and markets, allocating resources, and gaining commitment through disciplined implementation. It provides benefits like improved performance through a cooperative approach to opportunities and problems.
This document discusses how reducing payroll expenses through cuts is often a short-sighted approach that sacrifices long-term productivity. While payroll cuts may improve short-term profits, they damage productivity over time by requiring employees to do more with less. Instead, companies should view workers as strategic investments and focus on improving quality of work through training, incentives, and ensuring the right people are in the right jobs. The areas of payroll investment with the highest returns are training and incentives.
Bob Stone from Healthways, a solution provider company at the marcus evans Corporate Benefits Summit 2012, on improving well-being, thereby reducing employee costs and increasing individual and organizational performance.
Interview with: Bob Stone, Co-Founder & Vice President, Healthways
REW ARD AND COMPENSATION STRATEGY ISSUES ANDCHALLENGESS.docxjoellemurphey
REW ARD AND COMPENSATION STRATEGY: ISSUES AND
CHALLENGES
Sami A. Khan
The procurement, development and retaining of employees have never been so
important than today in most of the organizations worldwide. Companies are
relentlessly searching for ways to retain their core employees. Understand-
ing the interlinkages between peljormance management strategy, training
and development strategy. compensation strategy. and deployment of em-
ployees has become very vital for attracting, motivating and retaining good
employees. In this era of restructuring and downsizing, much needs to be
done by the employers to motivate their employees. The companies who are
restructuring themselves are finding it difficult to keep up the morale of their
employees. In many cases. the huge incentive and performance related pay
systems have failed, and the psychological contract between employees and
employers is under the process of redefinition. To sustain the motivational
level of employees. organizations must demonstrate to them a close link be-
tween performance and rewards. This is the rationale which is advocated
for the Lise of merit pay. But in spite of its attractiveness. the PRP and ESOP
sometimes bring about results precisely the opposite from the desired ones.
The role of H R manager has to be a facilitator's one to encourage line man-
agers in creating such an environment. The communication level between
the different st'akeholders is also required to be high to dispel any misunder-
standing and then a right kind of performance based work culture can be
nurtured.
INTRODUCTION
1fhe decade of the 90s will be known for mergers, acquisitions,restructuring and downsizing in business history. Companies. started looking beyond the internal boundaries for repositioning them-
selves to face the eventuality of the new, complex and fast-changing busi-
ness scenario. Though this was a difficult proposition for them as the rules
ofthe game were changing very fast, some ofthem grabbed this opportunity
nicely and became winners whereas some lagged behind. Gary Hamel re-
Management & Change. Volume 4. Number I (January-June 2000)
~ 2000 Institute for Integrated Learning in Management. All Rights Reserved.
92 Reward and Compensation Strategy: Issues and Challenges
marks that, "simply catching up to where others have been is necessary to
stay in the game, but the winners will be those companies who have the
ability to invent fundamentally new games." He is of the view that what-
ever any organization needs to know to create the future, it can. Microsoft
knew what it wanted as did CNN. He poses a question: Why was it CNN
rather than the BBC that created the global news network?!
In fact, the success of the company depended on its adaptability, re-
~ponsiveness and the extent of new learning. A business strategy with a
facilitating structure, system and processes acquired more attention in the
firms at the tail end of the twentieth century. The people management ...
De afgelopen maanden heb ik met veel CFO´s gesproken over de transformaties die hun Finance Organisatie moet doormaken om aan de veranderende eisen en wensen van Executives, managers en stakeholders te voldoen. Ligt hun focus momenteel nog op transactionele core finance activiteiten, voor de nabije toekomst is het hun ambitie om bedrijfsbreed veel meer waarde te leveren op het gebied van analyse en beslissingssupport.
Bedrijven die goed scoren op Finance Efficiëncy alsmede in staat zijn om betrouwbare Business Insight te leveren aan de diverse business units, zijn volgens de IBM Global CFO Survey 2010 aantoonbaar succesvoller op het gebied van omzetgroei, EBITDA en Retun of Invested Capital.
Ik wil graag de uitkomsten van 1500 face-to-face interviews met CFO´s met jullie delen, daarom ´share´ ik het rapport ´The New Value Integrator – Insights from the CFO Survey´.
The document discusses key concepts related to strategy and strategic management. It defines strategy as a plan or course of action related to pursuing organizational goals and objectives. Strategic management is described as a process directed by top management to determine long-term goals and ensure decisions align the organization with its environment. The strategic management process involves environmental scanning, strategy formulation, implementation, and evaluation.
Corporate strategy and high technology investmentTusara
The document discusses corporate strategy and high-technology investment. It defines corporate strategy as covering the scope and purpose of business, objectives, initiatives, and resources needed to achieve objectives. It also provides an overview of Walmart's highly effective corporate strategy, including its use of cross-docking and inventory management systems. Regarding high-technology investment, the document outlines key features like research, flexibility, proper funding allocation, and strategy formation, as well as limitations such as rapid technological changes, lack of competence, and global competition.
This document discusses various efficiency theories for mergers and acquisitions. It outlines theories such as differential efficiency, inefficient management, synergy, pure diversification, and strategic realignment. It also discusses undervaluation as a factor for M&As. Additionally, it covers agency problems that can arise between managers and shareholders, and how acquisitions can help address these issues. Finally, it outlines the hubris hypothesis, where managers may commit errors of overoptimism when evaluating merger opportunities due to excessive pride.
Stock options have traditionally been used to incentivize mining company executives but are falling out of favor due to concerns about risk. While stock options continue to be useful for junior mining companies with limited cash, regulatory pressure is increasing oversight of executive compensation. To balance risk and reward, companies should consider longer vesting periods, bonus clawbacks, and a mix of short and long-term incentives tied to multiple performance metrics.
1) NGOs need to measure performance both financially and non-financially to align activities with objectives and meet donor accountability. Financial measures include analyzing income sources, expenditures, financial sustainability, efficiency, and effectiveness using ratio analysis and trend analysis.
2) Non-financial measures are also important to assess impact on communities served and progress toward goals. These include tracking changes in skills, relationships, jobs created, and goals achieved over time.
3) An integrated approach to performance measurement using both financial and non-financial metrics provides a balanced view of organizational performance and opportunities for continuous improvement.
FRT - 110530 - BED - Why are some companies luckier than others - Frank LeendersFlevum
This document discusses how companies can transform their risk management approaches to create strategic value. It notes that while companies recognize the need to improve risk governance, many are overspending on risk management and not focusing on the most important risks. The document advocates aligning risk management more closely with business strategies to reduce costs, enhance transparency and improve performance. It outlines a risk performance model that companies can use to strengthen governance, integrate risk functions and measure risk management's impact on business objectives.
Ch 1 2013QUIZ strategic management concepts &cases 11th edition by Fred حمد بوجرادة
This chapter discusses strategic management and planning. It defines strategic management as making cross-functional decisions to achieve organizational objectives. The strategic management process involves formulation, implementation, and evaluation of strategies. Key terms are introduced, like vision, mission, strengths/weaknesses, opportunities/threats. The benefits of strategic management include improved performance, communication, and decision-making. Pitfalls can occur if not properly implemented.
The document discusses mergers and acquisitions (M&As) and related human resource management (HRM) issues. It defines different types of M&As and reasons for companies merging. Major HRM challenges in M&As include communication, training, employee retention, cultural clashes, and resistance to change. Culture differences between merging companies can significantly impact integration efforts if not properly managed. The document provides best practices for strategic planning, due diligence, negotiations and post-acquisition integration to help realize the intended benefits of M&As.
Common Objectives Performance Management System for Not-for-profit and Public...Browne & Mohan
Designing Performance management system for government, public sector and not-for-profit organization is a daunting task. Many of these organizations pursue long-term programs and projects. Alignment of various groups, departments and individuals within each department is the need of the hour. However, many of these organizations suffer from functional silos and focus on financial measures only. Managing for results by directing right staff behaviour and initiative taking is not facilitated. In this paper Browne & Mohan consultants present a common objective approach that could be used to fix accountability, ownership and outcome based behaviour in public sector and non-profit organizations.
How To Develop A Total Compensation Strategynlomas
This document outlines key steps for developing a total compensation strategy, including defining compensation and strategy, making strategic choices, and tailoring compensation systems to business strategy. It discusses assessing total compensation implications, mapping a compensation strategy, and implementing the strategy. The goal is to motivate performance through the right mix of base salary, short and long-term incentives, and benefits.
Strategic leadership involves managing the paradox between managerial and visionary leadership models. Effective strategic leadership determines strategic direction by developing a long-term vision of strategic intent with two parts: core ideology and an envisioned future. It also exploits and maintains core competencies, develops human capital, sustains an effective organizational culture through establishing ethical practices and balanced organizational controls measured by the balanced scorecard framework.
Corporate governance is used to monitor and control managers' strategic decisions by establishing order between a firm's owners and its top-level managers. It became necessary due to the separation of ownership and managerial control in modern corporations. Agency theory holds that conflicts can arise between principals (owners) and agents (managers) if their goals are not properly aligned. Various internal mechanisms like ownership concentration, boards of directors, and executive compensation seek to mitigate these agency problems and ensure managers make decisions that reflect owners' interests.
Quiz 5QUIZ strategic management concepts &cases 11th edition by Fred R. David...حمد بوجرادة
The document provides answers to 15 questions about mission statements and vision statements. It discusses where to find a company's mission statement, how to develop mission and vision statements if they do not already exist, how developing a mission statement can help resolve divergent views among managers, why mission statements should be reexamined when a company is successful, characteristics of good mission statements, and benefits of having clear mission and vision statements.
The document discusses several key internal forces that influence a firm's strategy and performance, including distinctive competencies, organizational culture, and resources. It explains that an internal audit gathers information about the firm's management, marketing, finance, and other operations to help understand how different parts fit together. The Resource-Based View contends that internal resources across physical, human, and organizational categories primarily determine performance if they are rare, difficult to imitate, and not substitutable. The document also reviews several aspects of management, marketing, production/operations, and tools like value chain analysis and benchmarking.
The document summarizes research on factors critical for successful organizational restructuring or reorganization. It identifies six key factors: 1) synchronizing the reorganization design with business strategy; 2) clarifying roles and responsibilities; 3) deploying the right leaders and capabilities; 4) designing the organization layer by layer rather than top-down; 5) minimizing execution risks; and 6) reorganizing during periods of strength rather than distress. Companies that incorporated more of these six factors reported much higher rates of reorganization success.
Quiz 1QUIZ strategic management concepts &cases 11th edition by Fred حمد بوجرادة
Strategic management involves analyzing external and internal factors to formulate strategies, implement plans, and evaluate performance. It is an objective, logical process for making major decisions under uncertainty. Effective strategic management requires understanding competitors and markets, allocating resources, and gaining commitment through disciplined implementation. It provides benefits like improved performance through a cooperative approach to opportunities and problems.
This document discusses how reducing payroll expenses through cuts is often a short-sighted approach that sacrifices long-term productivity. While payroll cuts may improve short-term profits, they damage productivity over time by requiring employees to do more with less. Instead, companies should view workers as strategic investments and focus on improving quality of work through training, incentives, and ensuring the right people are in the right jobs. The areas of payroll investment with the highest returns are training and incentives.
Bob Stone from Healthways, a solution provider company at the marcus evans Corporate Benefits Summit 2012, on improving well-being, thereby reducing employee costs and increasing individual and organizational performance.
Interview with: Bob Stone, Co-Founder & Vice President, Healthways
REW ARD AND COMPENSATION STRATEGY ISSUES ANDCHALLENGESS.docxjoellemurphey
REW ARD AND COMPENSATION STRATEGY: ISSUES AND
CHALLENGES
Sami A. Khan
The procurement, development and retaining of employees have never been so
important than today in most of the organizations worldwide. Companies are
relentlessly searching for ways to retain their core employees. Understand-
ing the interlinkages between peljormance management strategy, training
and development strategy. compensation strategy. and deployment of em-
ployees has become very vital for attracting, motivating and retaining good
employees. In this era of restructuring and downsizing, much needs to be
done by the employers to motivate their employees. The companies who are
restructuring themselves are finding it difficult to keep up the morale of their
employees. In many cases. the huge incentive and performance related pay
systems have failed, and the psychological contract between employees and
employers is under the process of redefinition. To sustain the motivational
level of employees. organizations must demonstrate to them a close link be-
tween performance and rewards. This is the rationale which is advocated
for the Lise of merit pay. But in spite of its attractiveness. the PRP and ESOP
sometimes bring about results precisely the opposite from the desired ones.
The role of H R manager has to be a facilitator's one to encourage line man-
agers in creating such an environment. The communication level between
the different st'akeholders is also required to be high to dispel any misunder-
standing and then a right kind of performance based work culture can be
nurtured.
INTRODUCTION
1fhe decade of the 90s will be known for mergers, acquisitions,restructuring and downsizing in business history. Companies. started looking beyond the internal boundaries for repositioning them-
selves to face the eventuality of the new, complex and fast-changing busi-
ness scenario. Though this was a difficult proposition for them as the rules
ofthe game were changing very fast, some ofthem grabbed this opportunity
nicely and became winners whereas some lagged behind. Gary Hamel re-
Management & Change. Volume 4. Number I (January-June 2000)
~ 2000 Institute for Integrated Learning in Management. All Rights Reserved.
92 Reward and Compensation Strategy: Issues and Challenges
marks that, "simply catching up to where others have been is necessary to
stay in the game, but the winners will be those companies who have the
ability to invent fundamentally new games." He is of the view that what-
ever any organization needs to know to create the future, it can. Microsoft
knew what it wanted as did CNN. He poses a question: Why was it CNN
rather than the BBC that created the global news network?!
In fact, the success of the company depended on its adaptability, re-
~ponsiveness and the extent of new learning. A business strategy with a
facilitating structure, system and processes acquired more attention in the
firms at the tail end of the twentieth century. The people management ...
De afgelopen maanden heb ik met veel CFO´s gesproken over de transformaties die hun Finance Organisatie moet doormaken om aan de veranderende eisen en wensen van Executives, managers en stakeholders te voldoen. Ligt hun focus momenteel nog op transactionele core finance activiteiten, voor de nabije toekomst is het hun ambitie om bedrijfsbreed veel meer waarde te leveren op het gebied van analyse en beslissingssupport.
Bedrijven die goed scoren op Finance Efficiëncy alsmede in staat zijn om betrouwbare Business Insight te leveren aan de diverse business units, zijn volgens de IBM Global CFO Survey 2010 aantoonbaar succesvoller op het gebied van omzetgroei, EBITDA en Retun of Invested Capital.
Ik wil graag de uitkomsten van 1500 face-to-face interviews met CFO´s met jullie delen, daarom ´share´ ik het rapport ´The New Value Integrator – Insights from the CFO Survey´.
This document discusses performance-driven compensation as a talent insurance policy for companies. It argues that tightly linking employee and business performance to compensation helps mitigate the risk of losing top talent. Specifically:
- Pay for performance aims to reward employees based on their impact, but cultural and implementation barriers have made it difficult for many companies. Lack of integration between performance and compensation systems also hinders pay for performance.
- Top performers and high-potential employees are most critical to retain, yet only 19% of UK companies base bonuses directly on individual performance targets tied to business goals.
- Differentiated compensation that disproportionately rewards top performers can motivate them and lower turnover risks, but requires clear goals, performance assessments, and compensation
The document discusses executive compensation practices at banks and financial institutions. It covers issues like pay freezes, incentive pay, performance metrics, restrictions on TARP recipients, calls for increased transparency and shareholder votes on compensation. It provides advice on selecting appropriate performance measures and ensuring compensation is tied to achieving goals.
Celebrate – Pricing Power
Pricing principles that capture value and enhance profitability
Pricing can no longer be an after-thought, with the pricing strategy and rate structure applied after the service offering is developed. Increasingly, clients want unique pricing structures that include shared accountability – this applies not only to agencies, but is part of a larger trend across many service-business industries. Successfully aligning interests requires integrating the pricing strategy as a core component of the offer – using price to help determine: What is included? How is success defined? How services are delivered. This discussion will take lessons learned from both advertising, and other segments to frame the role of pricing in the sales process. We will also discuss the ways leading-class pricing organizations find success with client procurement teams – who have been very effective at driving down rates. This includes the importance of differentiating cost vs. fees vs. value. Successful alternative fee programs are not positioned as new forms of discounting, but are leveraged as a different way to measure and compensate for value. And, finally, we will discuss the concept of "losing on price."
Speaker:
Scott Lippstreu, Principal, Deloitte Consulting LLP
The Alignment Health Check™ Value Proposition (V.2)Dragica Grbavac
The document discusses the importance of alignment within organizations to overcome challenges like lagging productivity and lackluster performance. It introduces the Alignment Health Check, which provides an assessment of how well processes, systems, people and external factors are integrated and aligned. The assessment identifies misalignments that can cause performance gaps and offers recommendations to improve strategic and operational alignment. Regular alignment assessments are recommended to sustain growth, profitability and reduce risks in complex business environments.
Driving Organizational Performance in Complex Times - Mark Kinnich 031710Mark Kinnich
This document discusses driving organizational performance in complex times. It argues that alignment is critical for sustainable organizational performance. Alignment means there is agreement on an organization's direction, operating philosophy, and relationships. Through alignment, organizations unleash the untapped intelligence and energy of their workforce. Aligned organizations are more focused, nimble, have faster decision making, and consistent environments, allowing them to attract and retain better talent and achieve improved performance.
The Path To Operational Excellence 5 Components Of SuccessNat Evans
The document discusses operational excellence and provides a definition and framework. It argues that operational excellence must be strategically focused on areas where an organization can outperform competitors to provide competitive advantage. It emphasizes that leadership must select a tight focus area and guide implementation, and that operational excellence initiatives should align with strategic goals to ensure support and sustainability. The framework identifies five drivers of operational competitive advantage: safety, asset productivity, human capabilities, process excellence, and supply chain management.
Compensation management faces challenges in effectively managing pay. Forms of pay include cash, bonuses, and non-cash compensation which is difficult for employees to value but provides opportunities for creativity. Compensation programs must consider the value of all employee roles and use pay to reward and motivate performance. Technology allows for standardized, automated compensation systems that minimize errors and facilitate performance-based pay. Legal compliance and affordability are also important considerations for compensation programs.
1) Compensation of sales managers often focuses too heavily on short-term incentives and lacks balance with long-term objectives.
2) There is an opportunity to simplify sales compensation plans by increasing the frequency of performance-linked targets and goals, using clear earning tables, and improving communication.
3) Organizations should consider balancing short and long-term goals in compensation, using a balanced scorecard approach to performance management, and enhancing recognition of sales staff.
Human Capital Trends in the Insurance IndustryRon Arigo
This document discusses 10 human capital trends in the insurance industry, focusing on 4 areas: leading, engaging, reinventing, and reimagining. It summarizes that leadership is a top concern for the insurance sector due to regulatory changes and evolving customer needs. However, many insurance executives do not believe their leadership pipelines are prepared. It stresses the importance of developing leaders at all levels through strategies aligned with business goals, assessing candidates' capabilities, and sustainable leadership programs with executive support.
The document discusses the objectives and principles of compensation. It aims to acquire qualified personnel, retain current employees, reward desired behaviors, control costs, and comply with legal regulations. There are several classifications of compensation objectives including equity, efficiency, macroeconomic stability, and optimal labor allocation. Compensation is formulated based on external market rates, individual worth, and salary. Reward programs are designed to motivate employees and support business goals, while recognition programs provide psychological benefits. Merit pay increases should be separated from reward programs to avoid entitlement and emphasize excellence over competency. Effective reward programs clearly define goals, desired behaviors, measurements, appropriate rewards, and ensure communication to employees. Common types of reward programs include variable pay, bonuses, profit sharing, and gain
Driving Organizational Performance in Uncertain Times - Mark Kinnich 031710Mark Kinnich
This document discusses driving organizational performance in uncertain times through alignment and engagement. It begins by outlining challenges to performance like strategy execution difficulties and lack of employee engagement. It then argues that alignment between strategy, structure, leadership and people practices creates organizational culture and drives engagement and performance. When an organization is aligned, decision making is faster, the workforce is more focused and nimble, and performance improves. The key is leveraging human capital through alignment to unlock untapped energy and intelligence in the workforce.
Riskpro India is a risk management consulting firm with offices in major Indian cities. It aims to provide integrated risk management solutions to mid-large sized corporations and financial institutions in India. Riskpro has over 200 years of cumulative experience across its multi-skilled team. It offers a variety of risk advisory services including Basel compliance, corporate risks, IT risks, operational risks, governance solutions, and legal risks. Restructuring is the process of radically changing relationships among stakeholders to make a company more profitable and efficient. It may be necessary due to poor financial performance, a new strategy, or correcting market valuation errors. Key factors for successful restructuring include setting objectives, focusing resources, communicating plans, executing swiftly, and monitoring progress. P
Driving Performance Through Enhanced Collaboration between HR and Finance.
Effective working relationships across functions — particularly HR and Finance — have traditionally eluded many organizations. A siloed approach won’t work in the future.
Issues of performance and rewardsmanagementSelf-employed
This document discusses several compensation practices and their potential impacts. It notes that forced performance distributions can demotivate solid performers and encourage dysfunctional behaviors by managers. It also discusses how backloading compensation to reward tenure can benefit both employees and employers by incentivizing knowledge accumulation. The document recommends piloting any new programs and carefully considering both intended and unintended impacts of compensation changes through monitoring and research.
The document discusses turnover and retention, outlining the difference between wanted and unwanted turnover. It provides a model of the various factors that impact turnover, including economic trends, industry trends, organizational characteristics, leadership and culture, skills development, rewards and recognition, job characteristics, and individual characteristics. Finally, it recommends six key areas to reduce unwanted turnover: early interventions, skill interventions, leadership interventions, rewards/recognition interventions, selection interventions, and job enrichment.
This document discusses dispelling myths about perceived trade-offs between profitability and sustainability. It finds that:
1) While business leaders recognize sustainability's importance, many see it conflicting with short-term profits. However, research found this trade-off may be a myth not backed by evidence.
2) Sustainable products and business models are not scaling fast enough to meet demands. New criteria are needed to give leaders license to accelerate sustainable transformation.
3) Research with leaders found pursuing sustainability is seen as slower and less reliable than traditional approaches. However, sticking to "business as usual" is seen as more complex and costly than embracing sustainability.
Hay Group invites you to its signature global business event - the International Conference. Slated to be held in Shanghai this year, the theme of focus is "Leading Transformation". Stay posted for more details on the event!
The social life of ideas: From innovation to profitHay Group India
The main challenge in organizational innovation lies in its execution, and not in having more ideas. Top companies create supportive cultures that transform ideas into profitable investments.
Companies need innovation to survive. In fact, there is no shortage of clever people and smart ideas. Hence the competitive edge comes from having the best execution – from the time the idea is first identified, shepherded through the corporate maze, and into the hands of the paying customer.
And yet, in many companies, the chase for short-term profitability can become the Achilles heel of long-term business sustainability. The way to avoid this is to have a deep-rooted culture that promotes innovation and new ideas to filter up and sideways.
This document discusses sustaining organizational culture change. It begins by explaining that culture represents how things are done in an organization and is an important driver of employee behavior. However, culture is intangible and changing behaviors across an organization is challenging. Most change efforts do not have lasting impact because they do not address the deeper drivers of culture like shared purpose and individual beliefs. To sustain change, interventions must target these underlying aspects of culture. The document advocates for aligning the individual, social, and organizational dimensions of culture to create shared meaning for employees. Leaders play a key role in culture transformation by modeling new behaviors and sending consistent messages. Lastly, the document notes that culture change is a journey that requires going deep, aligning culture
The global economic meltdown has radically changed the deal landscape. Research findings from Hay Group reveal that there are several critical success factors for all executives to keep in mind which make the difference between winning and losing in the M&A game.
The document discusses different learning styles and how understanding learning styles can help people work together more effectively. It describes four main learning styles: diverging (creators), assimilating (planners), converging (decision makers), and accommodating (do-ers). Understanding one's own learning style and the styles of others can help tailor communication and tasks to people's strengths. This allows for better motivation, commitment to goals, and collaboration within teams where members have diverse styles.
This document discusses aligning an organization's strategy and culture. It outlines three key ways to do this:
1. Aligning shared values, organizational messages, and desired behaviors to drive results. High performing companies clearly communicate their purpose and values throughout the organization.
2. Engaging and enabling employees to enhance performance. Organizations must ensure employees have what they need to do their jobs well and feel supported, not just motivated.
3. Challenging unwritten rules to enable transformation. Leaders must confront unhelpful cultural norms and behaviors internally to drive change.
The document summarizes key findings from Hay Group's annual Top Executives Compensation Report 2012-2013. Some of the main points include:
- Executive compensation in India is expected to rise moderately by 9% in the coming year.
- Factors like markets, strategy, culture and ambitions are better indicators of executive pay than job level alone.
- Companies place much higher value on the CEO role compared to other top executives, with CEOs paid 3-4x more in some industries.
- Sectors with evolving business models and need for outside talent see higher pay differentials for CEOs.
- Variable pay makes up 30-44% of total compensation for CEOs and
Talent Q provides online psychometric assessments called Dimensions and Elements that measure personality traits and abilities. [1] The assessments can be used for screening, selection, development, and other talent decisions. [2] They are quick to complete, adaptable, and provide data to inform various talent processes. [3] Organizations see returns through improved predictions of job performance, lower costs from streamlined processes, and better matching of candidates to roles.
Talent Q’s Dimensions provides a cost-effective way to measure the capability of sales staff, especially when assessing large numbers in revenue-critical roles.
CEOs at the world’s most successful companies know that they can only safeguard their organization’s competitive future if they have the right leaders to develop and implement their strategy.
Future winners are investing in the right leaders today. As in past recessions margins are being cut, costs pushed down, currencies are shifting – and future winning organisations are starting to reposition themselves.
This document summarizes strategies for leaders to avoid collusive managerial delinquency and address organizational culture risks. It discusses how inappropriate norms and risk-taking develop gradually through unchallenged assumptions. Leaders should explore internal doubts and uncertainties, understand implicit norms, and check assumptions behind language. Better listening and acknowledging diverse views in groups can surface issues to address before problems escalate.
Ask someone to name some management gurus and it’s a pretty safe bet that the name Bob Geldof won’t come top of their list. On the face of it, the rock star who sang about hating Mondays might sound like one of the most unlikely experts on management issues.
Emotional Intelligence (EI) helps measure and develop high-performance behaviors in employees using the validated Emotional and Social Intelligence Competency Inventory (ESCI). The ESCI measures 12 EI competencies through a 360-degree assessment and provides individualized feedback reports to help employees strengthen their EI. Research shows that EI accounts for two-thirds of the difference between average and top performers and is particularly important for complex roles. Organizations that implement the ESCI see benefits like enhanced innovation, faster change acceptance, better resource use, and improved motivation and collaboration.
In the words of EI guru Dr Daniel Goleman, Emotional Intelligence is: ‘the capacity for recognizing our own feelings and those of others, for motivating ourselves, for managing emotions well in ourselves and in our relationships.’
Leadership for tomorrow: Once more, with feelingHay Group India
Know yourself.’ The ancient Greeks considered this a must have
virtue. And they were right, as recent research shows a direct correlation between high leadership performance and accurate self-awareness – in other words, emotional intelligence.
Emotional Intelligence : Leadership Prescription for Tough TimesHay Group India
Emotional intelligence has remained a relevant leadership concept despite initial skepticism, as its core qualities help leaders address fundamental challenges in today's changing business environment. These challenges include leaner organizations requiring influence over direct authority, a diverse multigenerational workforce with different expectations, and an evolving collaborative leadership role. Emotionally intelligent leaders listen actively, engage and motivate diverse teams, and inspire trust especially during economic uncertainty. Research shows these leadership behaviors deliver results by modifying brain chemistry and narrowing the performance gap between leaders who do and do not demonstrate emotional intelligence.
According to new research from Hay Group, between one-third and one-half of employees report work conditions that prevent them from being as productive as they could be. The book "The Enemy of Engagement" outlines hidden impediments to employee performance such as excessive procedures, lack of resources, and narrow roles. It provides managers with insights and tools to ensure employees are willing and able to contribute at their maximum potential and radically improve productivity. The book is authored by leaders in Hay Group's employee research division and will be published in October 2011.
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Navigating the world of forex trading can be challenging, especially for beginners. To help you make an informed decision, we have comprehensively compared the best forex brokers in India for 2024. This article, reviewed by Top Forex Brokers Review, will cover featured award winners, the best forex brokers, featured offers, the best copy trading platforms, the best forex brokers for beginners, the best MetaTrader brokers, and recently updated reviews. We will focus on FP Markets, Black Bull, EightCap, IC Markets, and Octa.
Building Your Employer Brand with Social MediaLuanWise
Presented at The Global HR Summit, 6th June 2024
In this keynote, Luan Wise will provide invaluable insights to elevate your employer brand on social media platforms including LinkedIn, Facebook, Instagram, X (formerly Twitter) and TikTok. You'll learn how compelling content can authentically showcase your company culture, values, and employee experiences to support your talent acquisition and retention objectives. Additionally, you'll understand the power of employee advocacy to amplify reach and engagement – helping to position your organization as an employer of choice in today's competitive talent landscape.
The Evolution and Impact of OTT Platforms: A Deep Dive into the Future of Ent...ABHILASH DUTTA
This presentation provides a thorough examination of Over-the-Top (OTT) platforms, focusing on their development and substantial influence on the entertainment industry, with a particular emphasis on the Indian market.We begin with an introduction to OTT platforms, defining them as streaming services that deliver content directly over the internet, bypassing traditional broadcast channels. These platforms offer a variety of content, including movies, TV shows, and original productions, allowing users to access content on-demand across multiple devices.The historical context covers the early days of streaming, starting with Netflix's inception in 1997 as a DVD rental service and its transition to streaming in 2007. The presentation also highlights India's television journey, from the launch of Doordarshan in 1959 to the introduction of Direct-to-Home (DTH) satellite television in 2000, which expanded viewing choices and set the stage for the rise of OTT platforms like Big Flix, Ditto TV, Sony LIV, Hotstar, and Netflix. The business models of OTT platforms are explored in detail. Subscription Video on Demand (SVOD) models, exemplified by Netflix and Amazon Prime Video, offer unlimited content access for a monthly fee. Transactional Video on Demand (TVOD) models, like iTunes and Sky Box Office, allow users to pay for individual pieces of content. Advertising-Based Video on Demand (AVOD) models, such as YouTube and Facebook Watch, provide free content supported by advertisements. Hybrid models combine elements of SVOD and AVOD, offering flexibility to cater to diverse audience preferences.
Content acquisition strategies are also discussed, highlighting the dual approach of purchasing broadcasting rights for existing films and TV shows and investing in original content production. This section underscores the importance of a robust content library in attracting and retaining subscribers.The presentation addresses the challenges faced by OTT platforms, including the unpredictability of content acquisition and audience preferences. It emphasizes the difficulty of balancing content investment with returns in a competitive market, the high costs associated with marketing, and the need for continuous innovation and adaptation to stay relevant.
The impact of OTT platforms on the Bollywood film industry is significant. The competition for viewers has led to a decrease in cinema ticket sales, affecting the revenue of Bollywood films that traditionally rely on theatrical releases. Additionally, OTT platforms now pay less for film rights due to the uncertain success of films in cinemas.
Looking ahead, the future of OTT in India appears promising. The market is expected to grow by 20% annually, reaching a value of ₹1200 billion by the end of the decade. The increasing availability of affordable smartphones and internet access will drive this growth, making OTT platforms a primary source of entertainment for many viewers.
How MJ Global Leads the Packaging Industry.pdfMJ Global
MJ Global's success in staying ahead of the curve in the packaging industry is a testament to its dedication to innovation, sustainability, and customer-centricity. By embracing technological advancements, leading in eco-friendly solutions, collaborating with industry leaders, and adapting to evolving consumer preferences, MJ Global continues to set new standards in the packaging sector.
Industrial Tech SW: Category Renewal and CreationChristian Dahlen
Every industrial revolution has created a new set of categories and a new set of players.
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https://www.productmanagementtoday.com/frs/26903918/understanding-user-needs-and-satisfying-them
We know we want to create products which our customers find to be valuable. Whether we label it as customer-centric or product-led depends on how long we've been doing product management. There are three challenges we face when doing this. The obvious challenge is figuring out what our users need; the non-obvious challenges are in creating a shared understanding of those needs and in sensing if what we're doing is meeting those needs.
In this webinar, we won't focus on the research methods for discovering user-needs. We will focus on synthesis of the needs we discover, communication and alignment tools, and how we operationalize addressing those needs.
Industry expert Scott Sehlhorst will:
• Introduce a taxonomy for user goals with real world examples
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• Highlight the crucial benchmarks, observable changes, in ensuring fulfillment of customer needs
Best practices for project execution and deliveryCLIVE MINCHIN
A select set of project management best practices to keep your project on-track, on-cost and aligned to scope. Many firms have don't have the necessary skills, diligence, methods and oversight of their projects; this leads to slippage, higher costs and longer timeframes. Often firms have a history of projects that simply failed to move the needle. These best practices will help your firm avoid these pitfalls but they require fortitude to apply.
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1. The
changing
face
of reward
In the wake of the financial crisis, return on investment, cost control, risk and
engagement have emerged as the key concerns driving change in reward.
Our study examines how organizations – from the board down – are looking
to their reward programs to deliver the performance they need >>
3. 1
Contents
Executive summary 3
The new business imperative: do more with less 6
The talent management challenge 10
The impact on reward 18
The implications for reward 30
About the research 32
5. 3
Executive summary
The changing face of reward examines how the business drivers of reward are
changing due to the impact of the global downturn and other macroeconomic
trends in the global economy. The study is based on face-to-face interviews with
senior HR specialists from over 230 companies in 29 countries, which collectively
manage more than 4.7 million people and generate annual revenue streams of
approximately US$4.5 trillion.
Across all sectors and regions, organizations are struggling to re-build profitability following
the recession.With revenue growth hard to come by, they are focusing on cost containment
and performance improvement as the paths to profit growth. This requires them to balance
four, often conflicting, challenges: cost containment, performance improvement, talent
engagement and risk management.
Cost containment Talent engagement
Profit
growth
Performance improvement Risk management
In particular, the tension between cost containment and talent engagement was a very
strong theme to come out of the research. Organizations are very concerned about
retention and motivation, particularly for top performers, high potentials and those with
scarce skills. However, the option of paying more for retention or performance is often
no longer available and companies are focusing more on intangible rewards (such as
motivational leadership, challenging work and career development) to boost engagement.
7. 5
Reward is on the board agenda This is in part being driven by the growing
impact of regulation and taxation.The
Reward is no longer the province of concern is that this is deviating scarce
compensation and benefits experts. Representing management time to ensuring compliance,
anywhere up to 70 per cent of a company’s rather than formulating the best reward
total costs, reward is now a top management strategies for their companies. It can lead
issue, with the CEO and the board getting to outright distortions in reward structures
closely involved. The study shows that reward – for example to ensure tax effectiveness
is now more than ever under the microscope, – without consideration of whether
with CEOs asking: those structures work to drive sustainable
n hat performance are we getting in
W performance. Similarly, a heavy focus on
return for what we pay? compliance also risks stifling innovation
n hat is the effectiveness of all the costs
W as the board becomes wary of attracting
allocated to reward? adverse attention with non-conformist
n hat is the return on investment?
W reward structures.
Alongside this, the role of the compensation Developing and delivering reward programs
committee is undergoing radical changes, that are cost effective, drive performance
with a much greater remit to oversee all improvement, build talent and avoid undue
reward programs and understand their impact risks: these are the challenges ahead. Getting
on costs and risk. reward right is mission critical for all
organizations.
Top of mind
Throughout the responses to our research, common threads emerged as to what was top of mind
for respondents. Summarised below are the top three themes for each topic covered.
Business challenges Pay/performance relationship
Cost management Review metrics
Risk and regulation Better link between pay and performance
Competition Differentiating reward
Response to challenges Engagement changes
Cost management Intangible/total reward focus
Leadership development Line manager skills
Organizational redesign Improve communications/transparency
Talent strategy focus Reward and engagement
Internal development Employee surveys
Recruit/retain key talent Reward communications
High potential programs Line manager focus
Drivers of reward Reward management changes
External benchmarks Senior and line manager involvement
Performance management Increase reward communication
Cost management Centralization of management
9. 7
The recession has intensified the pace of rationalization of business and management
globalization as organizations seek out markets processes. In stagnant or slow-growth “ e are meeting these
W
where they see the opportunity to achieve markets, cost management continues challenges through
real growth. Many organizations in both to be critical to survival; but even those changes in our
developed and developing countries are organizations who continue to grow are
looking to expand internationally, to gain taking the opportunity to reassess their organizational
access to new buyers and spread the risks cost base, optimize their management structure, improved
of operating in just one market. processes and put their operations on processes, increased
a more sustainable course for the future.
productivity, and
Costs under the microscope
Companies in high-growth developing increased cost control.”
Companies in every region have been affected markets are working even harder to bring Financial services company |
by the fall in demand. Many niche players themselves up to international standards Europe
have disappeared in a flurry of consolidation, – many see the slowdown as a welcome
and competition has increased as organizations opportunity to gain some breathing space
fight to defend or extend their market share. from the intense pace of change.
Companies are focusing heavily on customer
retention and maintaining client relationships Organizations are emerging from the recession
while they wait for market conditions to improve. leaner and intent on concentrating on those
activities that bring the greatest returns to
As a result, cost containment is a major issue the organization. Difficult choices are being
for many organizations, in all regions and made; the money that is available has to be
sectors. Most have already cut employment earned through performance and allocated
costs as much as they can through redundancies, to those areas (and people) most critical to
restructuring, pay freezes and restrictions business success. While the focus remains
to internal investments. The focus for most on the bottom line, from now on increased
has now turned to the centralization and efficiency will be a core driver of profit growth.
We are looking at sustainability and affordability
carefully. We’re scrutinizing all activities to see
whether or not they are critical to our business.
Large multinational energy organization
11. 9
Return on investment has become an important
metric and one that needs to be better used and
tracked. There has been a marked shift from ‘pay
and treat people well’ to really getting a return
on HR investment.
SP 500 manufacturing company | US
13. 11
Sector focus: Retail – filling the boomer void
Hit first and hardest by the economic downturn as consumers immediately
cut back on discretionary spending, retail has been at the bleeding edge of the
recession. As a result, retailers have aggressively cut costs, inventory and staffing
levels in line with poor expected sales. As prospects begin to improve once more,
the focus for retailers is to identify and differentiate those employees
who make a major contribution to top line sales.
For the past two years the question of retention in the sector has barely raised
its head. But when demand bounces back – whenever that may be – the pressure
to recruit talented sales people and managers, particularly those with global
experience, will be enormous. The pressing issue for the sector is where will it
find that key talent.
Until the 1990s the sector had a strong tradition of developing talent internally,
spicing up the mix with a small number of external hires. The increased
globalization of business, the boom in ecommerce and the enhanced role
of branding transformed that strategy, as global retailers looked for talented
recruits with international experience and branding skills. The danger for the
sector is that consumer demand – and correspondingly the need for top talent
– will increase sharply at the same time as a legion of baby boomers in the sector
reaches retirement age.
In order to compete effectively, organizations will have to quickly identify their
best and brightest, decide the best way to retain them, and prepare them for early
responsibility. For many this will represent a significant shift in talent management
strategy. Internal investment in and development of talent will play a vital role
in the ability of organizations in the sector to compete, as will the relatively
unfamiliar process of identifying and differentiating those employees with the
potential to make a significant impact on top line sales.
“We focus internally and only go to the market when we need to. We are looking for
people who are creative and innovative in their approach and also have an innate
sense of world-class fashion.” Benetton | India
“ ank Mandiri plays the role of a ‘talent factory’ but retaining that
B
talent is a challenge because foreign banks want to leapfrog that
development phase and buy local talent to start up the business
immediately”
PT Bank Mandiri | Indonesia
15. 13
Engagement is no longer optional job security – but organizations are acutely
aware that, come the upturn, this will not “ t is not easy to
I
In a challenging global economy where last. Many organizations have also cut maintain a high level
organizations are running lean, tapping back on some of the most significant drivers
into the discretionary effort of engaged of engagement, such training and career
of engagement during
employees is imperative. Our research has development. a crisis, but leaders
shown that organizations in the top quartile must be able to
on engagement demonstrate revenue growth In this environment, leaders need to help
2.5 times more than that of organizations employees understand that an organization
manage engagement
in the bottom quartile, and those that score has a coherent strategy that will allow it to even when they need
highly for both engagement and enablement succeed and that all employees have a role to make unpopular
have revenue growth 4.5 times higher. to play in helping the organization carry out
its plans. Employees are being asked to make
decisions.”
Maintaining this engagement is challenging sacrifices for the organization and it is vital Pirelli | Italy
when the recession has left many organizations that they have a sense that decisions are being
with a disaffected and worried workforce made rationally and equitably, and that the
who are pessimistic about their future. In the changes will result in better organizational
current environment, many employees are effectiveness and an improvement in their
focusing less on salary increases and more on work environment.
India: Moving with the times
While the Indian economy has suffered less than many, there has nonetheless been a marked
change in the outlook of employees and employers. The opportunistic, job-hopping Indian
employees of recent times are realizing they cannot sustain that trajectory, with its lack of
opportunities for learning and development. Employers are also finding themselves under
examination from candidates who are looking for long-term career prospects. Recruitment
discussions are moving away from the boom-time focus on “how much money?” and “when
will I get an increase?” to “what is the business plan?” and “how will this enrich my career?”
“In the Indian context, we find it difficult to be harsh on anyone especially since our appraisal
matrices are not in place. So we reward for attributes and for effort rather than for results. The talent
being inducted into the organization now is much younger than the current average staff age of
38 years. They get restless if they think they are to be measured using subjective processes and will
soon move. Our reward management [is designed] to meet their expectations.” Raymond Ltd | India
17. 15
Sector focus: All change for life sciences
The life sciences sector has undergone a transformation in recent years as the industry
has moved from product-centric selling (focused primarily on prescribers) to
business-to-business sales. The challenges are indeed formidable. Beyond the economic
difficulties that every industry is facing, companies in life sciences have a unique financial
crisis all of their own: the loss of somewhere north of US$135 billion in revenues from
products that will lose patent protection by 2013. This ‘patent cliff’ means that by 2013, the
equivalent of more than 18 per cent of the industry’s global revenue for 2008 will be gone.
Moreover, the industry is facing a more fundamental challenge: the need to replace a
business model that has sustained it for 20 years. The shift from a retail to a commercial
model has forced organizations to find new ways of tapping into their people resources
in order to drive performance.
As the industry begins to scale back and manage costs more aggressively, we expect
to see greater movement to managing fixed compensation costs, particularly in base
compensation. As the business model in big pharma is changing, some roles will change
significantly (e.g. key sales roles, business development and licensing, etc.); thus we expect
incentive and compensation strategies will need to adjust to these business model changes,
particularly on the commercial side of the business.
“We are looking at our sales areas – the revenue generators. We aim to develop retail, channel
and medical capabilities in our sales force. We will use this as a USP to help us acquire new talent
and also as part of employee motivation and development” Novartis Ltd. | India
As in other industries, life sciences organizations are placing an increased emphasis on
return on investment. Organizations in this sector are moving towards a set of holistic
metrics that are less focused on top line growth as the primary driver and take into account
a more balanced set of measures of corporate performance.
There is now more attention being paid to the
balance between financial and non-financial
performance; it has been too financially oriented.
Large financial services organization | Europe
19. 17
The best system is not a substitute for defining performance rests with leaders;
for management and responsibility for managing performance “ he role of line
T
in accordance with that definition rests with management is
Organizations are also investing in ensuring line managers. Provided line managers are
supportive of senior executives, they are ideally
definitely changing
that their performance management systems
and processes work to drive the performance placed to foster high levels of confidence in and it will continue
they define. In some cases this means the organization’s leadership and direction and to change specifically
introducing more efficient systems and to help employees understand organizational
expectations.
for middle managers.”
processes, and centralizing or automating
Höegh Autoliners | Norway
performance management. But most
recognize that those systems and processes The other side of the coin is an increasing need
will only work if they have the right culture to address low performers – to lift them up, or
and management skills to support it. The manage them out. Low performance may have
focus for many, as a result, was on building been tolerated in the past but few organizations
management skills around performance can afford to ‘carry’ anyone anymore. There
management, and on ensuring the transparency is a general recognition that addressing poor
of the performance management process. performance is often a more challenging task
than dealing with high performers, and again
There is growing recognition that a organizations are looking to better equip line
performance management system is not a managers to have those difficult conversations.
substitute for management. Responsibility
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e believe that our reward program has the ability
to motivate high performers to do better as well as
urging low performers not to lag behind.
Godrej Industries Ltd | India
21. 19
Sector focus: Financial services – regulation as a fact of life
While the financial services sector has been the focus of much of the increased regulation
and scrutiny over reward practices in the wake of the financial crisis, this survey suggests
that many organizations in the sector are taking governance changes in their stride. They
may be most heavily impacted by regulation, but they were some of the least concerned
about it. The most likely explanation is that compliance is a fact of life for these organizations
and they already have the resources and skills in place to deal with it.
That said, most financial services organizations are changing their reward strategy to align
with their business strategy and the changed regulatory and governance environment.
Many are concerned about their ability to attract and retain talent with increasing
restrictions on reward. In an attempt to address these concerns many are intensifying their
talent development programs or turning to other sectors in the search for skills. As a result
organizations continue to watch their competitors’ reward strategies carefully and place
great value on external benchmarks.
Performance management is also a focus for many. Current performance management
is seen as too complex, not aligned with overall corporate performance and weak in
differentiating between high and poor performers. Many organizations are also struggling
to find ways to address risk within the performance management process, and to
incorporate non-financial measures in the assessment of performance.
The aim for many, ultimately, is a reward approach that achieves a better balance between
short and long-term performance, between tangible and intangible benefits and between
base and variable pay. There is a strong desire to involve line management in the process of
reward and to improve transparency of communication for employees. For the time being,
however, the issues of the day stand in the way of immediate progress.
“Regulatory compliance has become a significant driver since the financial crisis. This is, of course,
most significant for the more senior management roles but may also have an impact lower
down.” Large financial services organization | Europe
23. 21
Think globally, implement locally
The most frequent point of conflict in implementing a global remuneration strategy lies
between the corporate philosophy and design components and the local country operations.
Local regulations, practices and cultural expectations play a significant role in reward but can
be lost or ignored in a centralized strategy.
Brazil, for example, is one of the most sophisticated markets in the world when it comes to
short-term incentive programs. According to Hay Group research, 99 per cent of Brazilian
organizations run a short-term incentive program for their employees and foreign competitors
have frequently struggled to keep up. The emphasis on short-term incentives (and targets)
lies in Brazil’s history of hyperinflation but continues to be actively encouraged through the
country’s tax and legal system.
Russia, by contrast, is an environment where incentive-based reward has rarely been taken
seriously (although many organizations are working hard to address this). Their experience
of past economic crises means that many Russian employees prefer the security of base pay
to uncertain bonuses. As an added complication, many Russian organizations overpaid and
over-promoted workers during the boom years, leading to a weak and haphazard link between
pay and performance. While many organizations are working to introduce a performance-based
pay strategy, many challenges remain.
Imposing a global policy on variable pay without an understanding of the different markets is
obviously not workable. Hay Group’s research has identified these key steps for the successful
implementation of a global reward strategy:
n form a global total remuneration strategy that is more than a mission statement and has
clarity around non-negotiable areas
n explain the global philosophy to all local countries and test it with them to identify
in advance any unintended consequences that may result from local taxes, culture
and employment practices
n translate the global philosophy into local implementation plans
n clearly spell out the rationale for employees
n continually measure and tests the results on an employee satisfaction basis and against
local markets.
We are moving away from a ‘spread the peanut
butter approach’ to one of ‘feed the eagles’.
BMW Manufacturing | US
25. 23
A ‘one size fits all’ reward program will not be
applicable. The trend will go to ‘one size fits me’.
Essent | Netherlands
Differentiating reward high-performers and key roles that are seen
as critical to the business.
Organizations in all sectors are striving to
forge a closer link between performance and Hay Group’s research into the reward strategies
reward. While this aspiration is nothing new, the of Fortune’s Most Admired Companies has
difference now is that the challenges it brings can shown that the best organizations carefully
no longer be placed into the ‘too hard basket’. target their use of differentiated reward.
Many respondents to the survey talked about When bonuses are taken into account, senior
a general shift from a culture of ‘entitlement’, managers in the world’s top organizations can
‘paternalism’ and ‘comfort’ to one of earn 20 per cent more than their peers. These
‘performance’. In practical terms this is people are being rewarded for their ability to
leading to a greater differentiation of reward deliver and ensure that their organizations stay
based on individual performance. The limited at the top of their sector – they are driving
budget that is available is being put behind the strategy and motivating their people.
Top six pay-for-performance actions
1. ntroducing differentiated reward structures where available rewards increasingly go to
I
the top performers and high potentials; those critical to the survival of the business, now
and in the future.
2. uilding line management skills in setting goals, coaching performance and recognizing
B
and rewarding performance.
3. Clarifying definitions of performance.
4. alancing individual and enterprise targets for bonuses.
B
5. Aligning individual targets to overall strategy.
6. aking greater use of multiple rewards, mixing short and long-term incentives with the
M
motivational stimulus of better career development and varied and interesting work.
27. 25
Variable pay comes into its own employees in the organization’s goals. The best
organizations are using variable pay not purely
An increasing trend as organizations as a cash flow tool but as a support mechanism
emerge from the recession is a shift in balance for their performance management strategy.
between fixed and variable pay. This is partly In these organizations the challenge is to
cost-driven, as those organizations with higher develop an appropriate balance between short
proportions of variable pay (and therefore the and long-term incentives based on the nature
flexibility to cope with economic volatility) of the role, with many organizations increasing
have often been better placed to survive the opportunities for long-term incentive
without shedding jobs. awards. Short-term incentives are pushed
further down the organization to convey that
Variable pay is also a critical lever for individual performance affects the success
motivating performance and engaging (or otherwise) of the business.
Five common trends in variable pay
1. inking bonuses to medium and longer-term targets that support sustainability and
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organization performance over the longer-term.
2. nsuring bonuses are properly funded, with a focus on growing the bottom line as the
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main driver.
3. Balancing individual and enterprise performance in designing bonuses.
4. implifying programs, in particular by reducing the number and variety of bonus schemes.
S
5. Clarifying and communicating the intent and design of variable pay.
“ he technical, financial and other
T
support areas should have initiatives
and targets that effectively translate
each person’s contribution to business
results, but that also represent a
comparable challenge for leaders.”
Companhia Energetica de Minas Gerais | Brazil
29. 27
Watching the market Many organizations are looking to measure
and, increasingly, communicate to their
While there is clear evidence that organizations employees the total value of their reward
are paying enormous attention to the link package. The increasing centralization of
between pay and performance, they are still reward management and the desire to have
keeping a close eye on the reward strategies greater visibility over total reward spend also
of their competitors and on market trends. means organizations are looking more at total
Participants in this study were very clear that remuneration rather than just total cash.
market benchmarking remains a primary
design factor in reward. A high proportion Say what you need to say
of organizations were looking to refine how
they benchmarked, driven by a desire to make The new trends in reward strategy cannot
sure they were not paying over the odds, and succeed without a solid foundation of good
by a general need for greater transparency. communication, based on strong leadership.
With senior management taking an active At every stage – the drive towards variable pay,
interest in reward, they want to know why a closer link between performance and reward,
the organization is paying what it is. differentiation of high and low performers,
retention of talent and a trend towards total
Benchmarking, as a result, remains critical, reward – there is a risk that the return on
but market data is being used in a different investment will be lost because leaders and
way. Organizations are looking for a better managers have not clearly communicated
context for their data so they can clearly justify the organization’s intention and strategy.
decisions made on the basis of it. They are
also using that data in different ways – the Hay Group’s research into Fortune’s Most “ e need to have
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focus on benchmarking is particularly strong Admired Companies revealed an emphasis a broader view of
in developing markets and in high-growth on promoting the total rewards view – the
companies, and when considering key roles best organizations do not necessarily offer
the market we are
and talent. In developed markets and slow or more intangible rewards than their peers, but competing in and
no-growth companies, they are more likely to they do a much better job of communicating a critical eye when
be looking for ways to balance evidence from what they do offer and of making employees
market benchmarks with affordability. The understand their value. The best organizations
choosing our peer
focus is now less on competitiveness and more develop a course of action that weaves the group, according to
on maximizing the return on investment from reward program messages into the fabric the levels in our job
reward spend. of the organization; ensuring core messages
are clearly communicated and reinforced
structure.”
Changes to the way organizations benchmark, frequently; using total reward statements, Braskem | Brazil
and the data they use, are also on the horizon. and engaging line managers, early and often.
Right now, affordability is more
important than competitiveness.
Multinational manufacturing organization
31. 29
Sector focus: Communications, media and technology – managers in the spotlight
The recession has accelerated some long-term trends in the sector. Key players are realizing that
they need the operational efficiency of retail, coupled with the regulatory nous of life sciences,
all supplemented with the consumer savvy and responsiveness of manufacturing and FMCG.
And of course, organizations are now beginning to recognize the role of the manager in driving
performance and efficient reward.
While reward issues are not immediately top of the agenda, many see an efficient reward policy
as a key enabler to attract and retain the right talent, support the corporate goals, and create
the conditions for delivery. In practice, this means a renewed emphasis on pay for performance,
cost reduction, and making sure that the reward system drives the right behaviors to deliver on
goals. During the boom years there was room for inefficiency and if the performance element
was not quite right, it could easily be overlooked. Now, organizations are looking to managers
to really manage.
“The new plan is fairer for both the company and employees, based on profits and results with
performance measures a mix of individual and corporate goals. We have been investing in
management development so managers can effectively lead their teams: clearly defining targets,
agreeing on expectations, and managing remuneration in line with performance.”
Algar | Brazil
Improving general management skills is key to delivering on the apparent paradox of reduced
reward budgets and improved employee engagement and productivity. Yet Hay Group shows
that this square can be circled: with the world’s best companies typically paying less than their
averagely-performing counterparts. A key element of this is communication, but less than
10 per cent of CMT organizations mention the role of managers in communicating reward.
The keys to success in the new operating environment are: a recognition of the power of an
efficient reward system in driving performance, coupled with real performance management
and an emphasis of the role of managers in ensuring that the organizations resources
(people and reward budget) entrusted to them are put to good use. The sooner companies
can grasp this issue, the more likely they will be able to beat the competition.
33. 31
Panic and the need to cut costs
may have been the significant
drivers but the lasting legacy
is a concentration on the
optimization of pay.
For many, the recession has been an their reward and performance management
opportunity to retrench and reassess. systems. Panic and the need to cut costs
Organizations have seized the chance to clarify may have been the significant drivers but
their reward strategy and seal any cracks in the lasting legacy is a concentration on the
the foundations, improving and strengthening optimization of pay.
The reward ‘to do’ list
1. Review reward strategy to ensure that it supports business strategy.
2. eassess performance criteria so reward is linked more closely to goals that clearly reflect
R
the vision and strategy of the organization.
3. eview the balance of variable and fixed pay to ensure it is right for the company culture
R
and for business needs.
4. se reward differentiation (where appropriate) to focus limited resources on those most
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successful to the business: high performers, high potentials and those with skills that are
in short supply.
5. Closely assess and measure the return on investment from reward programs and strategy.
6. ommunicate the true value of your reward package, and how it supports the goals
C
of your business.