1) According to a recent Talent Management & Rewards study, Indian companies differentiate performance ratings and compensation less than their Asian and global counterparts, with more employees receiving top ratings and higher base pay. 2) The study found that top performers in India receive less variable pay than similar performers regionally and globally. 3) Lastly, companies in India seem to emphasize performance through base salary increases rather than incentives in order to manage attrition.

1. Towers Watson
Performance & Rewards – A point of view
Subeer Bakshi
November 2013
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2. A point of view
● From our recent Talent Management & Rewards Study, it emerges
unsurprisingly that companies in India are not differentiating as much
as their Asian or Global Counterparts.
●
●
●
On a five point scale of performance distribution, more people are counted
in top and above average ratings, and less people are included in ‘meets
expectations’ The lowest two levels of performance are consistent with
regional and global norms.
In terms of payouts, top performers get lesser than their regional and global
counterparts, understandably as there are more people eligible for the
differentiated and higher rewards.
Lastly, base pay is also being used as a vehicle to emphasis differentiation
contrary to conventional approach to rewards management that aims to
emphasize equity through base pay and differentiation through incentives.
● All these and related factors are seen probably as an effort by
organizations to manage attrition using liberal amounts of guaranteed
cash.
2
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3. AP Vs Global Trends in performance distribution and merit increases
59.0%
60.0%
55%
50.0%
More people need to be counted
among top performers in India
Performance Distribution
40.0%
30.0%
57.0%
20.0%
20.0%
20%
10.0%
10.0%
19.0%
5.0%
5%
7.0%
10%
10%
9.5%
9.5%
5.0%
0.0%
did not meet
partially met
met
Global
Source: TW TM&R Global Report
AP
exceeded
far exceeded
India
3
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4. Annual incentive trends – target and payout values
160%
Companies differentiate less
to maintain more equity
140%
130%
Target payout by performance level
120%
135%
115%
115%
100%
100%
100%
80%
60%
120%
110%
50%
55%
100%
40%
53%
20%
0%
0%
did not meet
partially met
met
Global
AP
far exceeded
India
4
Source: TW TM&R Global Report
4
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exceeded
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5. Budget Allocation
Emphasis on performance is made through merit increases.
% of Employees
% of Merit Budget
50%
49%
% of Variable Pay Budget
50%
27%
25%
20%
18%
17%
14%
10%
6%
5%
1%
0%
Did not meet
Source: TW TM&R Global Report
7%
Partially met
Met
Exceed
Far Exceed
5
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6. TM&R 2012 - Participants’ profile
36%
64%
Organization
Objective
AP Fast Growing:
China
130
India
89
Indonesia
52
Malaysia
31
Philippines
129
Thailand
41
Vietnam
35
AP Developed:
Australia
16
Hong Kong
28
Japan
54
Korea
34
Singapore
63
Taiwan
94
Industry Classification
Geographic Span
Asia Pacific
Which of the following best
describes your total organization?
40%
51%
20%
For-profit, publicly traded
47%
For-profit, private
3%
37%
37%
Not-for-profit, Government
25%
•
•
•
•
•
•
•
•
•
•
0%
Aerospace and Defense (1%)
Automobiles and Transportation
Equipment (4%)
Chemicals (4%)
Communications (1%)
Consumer Goods & Retail (11%)
Energy (3%)
Financial Services (20%)
Food and Beverage (3%)
Health Care (8%)
High Technology (12%)
•
•
•
•
•
•
•
•
•
Entertainment (1%)
Hospitality (2%)
Manufacturing (13%)
Professional and Business Services
(5%)
Property and Construction (4%)
Publishing (1%)
Telecommunications (2%)
Transportation (2%)
Wholesale (2%)
India
Which of the following best
describes your total organization?
58%
60%
40%
27%
51%
For-profit, publicly traded
49%
For-profit, private
Source: TW TM&R Global Report
20%
0%
15%
•
•
•
•
•
•
•
•
•
Aerospace and Defense (2%)
Automobiles and Transportation
Equipment (4%)
Chemicals (3%)
Consumer Goods (3%)
Energy (2%)
Financial Services (16%)
Food and Beverage (1%)
Health Care (13%)
High Technology (13%)
•
•
•
•
•
•
•
•
•
•
Entertainment (1%)
Hospitality (1%)
Manufacturing (9%)
Professional and Business Services
(12%)
Property and Construction (2%)
Publishing (1%)
Retail (3%)
Telecommunications (8%)
Wholesale (1%)
Others (5%)
6
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7. Performance & Rewards – A point of view
- END India,
November 2013
© 2013 Towers Watson. All rights reserved.