Reward & Talent together! We need to Sorry but this get/keep this will definitely hughe talent in not fit our whatever the reward policy price may be Talent Management Reward Management 8
Reward approach for talent • One size fits all policies • “Overall Average median positon in the total market” • Very limited salary increases budgets • Managing exceptions/police department • Pay for (short-term) performance We need much more flexibility in our reward programms to attract and retain our best talents
Talent Mgt Language Consistently demonstrates outstanding leadership Consistently demonstrates leadership at the expected level Does not demonstrate leadership at the expected level. Fails to meet stretching Consistently meets stretching Consistently exceeds stretching performance targets. performance targets. performance targets.
Reward Mgt Language125%110%Media n 90% 80% Year 1 Year 2 Year 3 Year 4 Year 5 Base Variable Benefits
Base pay flexibility 125% 110%Median Middle boxer Green boxer 90% Yellow boxer Red boxer Key Jobs 80% Mid Career Recruit Year 1 Year 2 Year 3 Year 4 Year 5
STI: Pay for performance • Strong differentiation tool • Link to business results • Link to individual targets • Different approaches possible!
Pay for performance: rigid Company Team Individual SOTP X Entity X Individual KPIs 0-160% 0-100% 0-100%
Pay for performance: rigid • Simple • Individual overperformance • Predictable • Management judgement • Business link • Declining markets • Performance driver • Zero bonus years • Future Potential
Pay for performance: open Business Performance = Differentiation Factor € Bonus € Bonus Individual Target Performance = 1 2 3 4 5 PDP Rating Business Performance Individual Performance is relative is relative 16