THE REWARD BAROMETER: TRENDS & PROJECTS
SHAPING TODAY’S REWARD MANAGER’S AGENDA IN
2014 AND BEYOND
FEMKE DHONT, CENTRE FOR...
1
METHODOLOGY
SURVEY

Questionnaire

17 December 2013– 25 January 2014
43 companies
All sectors

4

© Vlerick Business School
COMPANY SIZE
Number

3% 7%

7%
14%

69%

0-200
201-500
501-1000
1001-2000
More than 2000

5

© Vlerick Business School
BUILDING BLOCKS

Current
reward
practices

6

© Vlerick Business School

Strategic
importance
&
satisfaction

Reward
Trend...
2
CURRENT REWARD
PRACTICES
REWARD FRAMEWORK

8

© Vlerick Business School
DO YOU HAVE A FORMAL REWARD STRATEGY?

‘Reward strategy is ultimately a
way of thinking’

100%
80%

(Brown)

60%
40%

2013...
WHICH FACTORS DETERMINE BASE PAY
PROGRESSION?

100%

80%
60%
40%
20%
0%

% of respondents

10

© Vlerick Business School
WHICH FACTORS DETERMINE THE PAY-OUT OF
INCENTIVES?
100%
80%
60%
40%
20%
0%

% of respondents
11

© Vlerick Business School
3
STRATEGIC
PRIORITIES &
SATISFACTION
STRATEGIC IMPORTANCE VERSUS
SATISFACTION
Satisfaction
5.50

Keep

1 – Diversity
2 – Recruitment
3 – Retention
4 – Grading
...
HIGHEST PRIORITIES

14

© Vlerick Business School
4
REWARD PROJECTS
FOR 2014
TOP OF MIND IN 2014

16

© Vlerick Business School
WHAT WILL BE ON THE AGENDA THE COMING
YEARS?

TOP Reward Projects 2014
Reward Communication

Short-term Incentives
Perform...
CONCLUSION – CHALLENGE FOR 2014

Make rewards…

18

© Vlerick Business School
5
THE REWARD
BUILDING OF THE
FUTURE
Indicate to what extent you agree
that the following suggestions are
sustainable elements for the reward
building of the f...
BASE PAY – EVALUATE THE FEASIBILITY OF
THE FOLLOWING SUGGESTIONS..
Increase based on individual
performance
Seniority-base...
WHATS DOES THE LITERATURE SAY ABOUT
SENIORITY-BASED PAY?

Tenure and performance are positively
linked, but
At a diminishi...
VARIABLE PAY – WHAT DO YOU THINK ABOUT
THE FOLLOWING SUGGESTIONS?

Profit Sharing Systems

Target bonus as fixed amount

P...
EMPLOYEE BENEFITS – YOUR THOUGHTS ON
THESE IDEAS?

DC plan based on reference salary

Mobility Budget

© Vlerick Business ...
MORE INFORMATION?
Femke Dhont – Programme manager
Femke.dhont@vlerick.com

+ 32 (9) 210 97 64
FemkeDhont

www.vlerick.com/...
The Reward Barometer
Upcoming SlideShare
Loading in …5
×

The Reward Barometer

1,734 views

Published on

Published in: Education
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
1,734
On SlideShare
0
From Embeds
0
Number of Embeds
850
Actions
Shares
0
Downloads
29
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide
  • Eenkleineprijsuitgereiktvoor de eerste die de vragenlijstheeftingevuld en aanwezig is.De snelsteantwoorder was Werner Verlinden. Eenuurnaverzending de vragenlijst al had vervolledigdDaarna was het eennekaannek race met enkele
  • 1 respondent meerdanvorigjaar  oproepnaarnogeengrotereopnamevolgendjaarAverage 15 min
  • Meerderheid =groterdan 2000
  • Wat is ervandaag – watzalermorgenzijn – watbrengen de komendejaren (of watzoudenzemoetenbrengen?)
  • Als we kijkennaarons reward framework.Zien we datbijgebrekaaneenformele reward strategieereenbelangrijkebouwsteenwegvalt..En het huisjeinstort??
  • Goedenieuws = bijna 80% ja! In vgl met enkelejarengeledenIn 2009 op residentieelseminarienavraaggedaan ‘hoeveelbedrijven op dat moment eenformele reward strategiehadden’ Veel minder
  • Interessantevraagomdantebekijken is welkevariabelen de stijgingbepalen.Individual performance (80%)  meerdan ¾ van individueleprestatiesMarket positioning (50%)Individual competencies (40)Company performance (+ 20%)Zeerbeperkteinvloed van resultaten van bedrijf. Other = compa-ratio/retentionQ on rewarding PfP: nuance:Daarwerdeenonderscheidgemaakttussenrecurrente en niet-recurrentesalarisstijgingen. Ditonderscheidleidde tot opmerkelijkverschiltussen de factoren die de progessiebepaaldenRecurrentestijging: zowelindividueleprestaties en compentiesspeleneen even groterolNiet-recurrentestijgingen: vooralindividueleprestatiebelangrijk en competenties minder relevant
  • Individual performance (86%  meerdanbij base pay increase)Company performance (76%  duidelijkbelangrijkerdanbij base pay!)
  • Eentweedeblokwaar we reward managers over bevraagdhebben.
  • STRAT IMPORT:4 = neutral/ 5= somewhat important/ 6=very important/7= extremely important5,5 = importantSATISFACTION:4,25 = neutraal/5,5=satisfied tussen 5=somewhat satisfied ( algemeenvrijontevreden)Highest priority: Internal & External equity/Performance management/ Cost management/Areas of concern: Retention/ Compentencemngt/Workforce PlanningKeep: Diversity/ Recruitment/GradingNikswaar we tevreden over zijn en belangrijk is
  • 4Grootsteprioriteiten op 2014 (ditdusbovenaan de agenda zoudenmoetenstaan):Internal & external equityPerformance managementCost management
  • Nuhebben we al gekekennaar de beloningspraktijkenvandaag en het strategischebelang en de tevredenheidvandaag. Maar laten we onsgrenzenbeetjeverleggen.Met welkeprojectenzullenjulliezichbezighoudentijdens de komende (nu nog) 11maanden?
  • Heteerstewatjulliegaandoen.. Is praten.  Reward communicatie is jullie nr 1 voor 2014(waarvorigjaar op nr 1 plaats was voor het werkenaan de car policies)Naastcommunicerenstaanooknog 3 andereprojecten op de agenda (allenongeveer even belangrijk)Short-term incentives, performance management en projectenrond base pay zijnookvoor 2014 top of mind. (Ookomdatookvorigjaarwerdrond de eerste 2 hard gewerkt. Base is daarentegen is eennieuwecategorie, daarwaarvorigjaarrondgroeps-en hospitalisatieverzekeringenwerdgewerkt)Algemeenkunnen we uit die projectenafleidendat 2014 het jaar van PAY (ST,Base pay, perf) wordtdaarwaar we vorigjaarvooralfocusten op BENEFITS (car, verzek)
  • Gerapporteerdvorigjaartijdens survey: reward communication, pfp, car policies, pension&group insurance
  • Uitdaging 3-voudigIndiv & differentiation were perspectives were reward managers weren’t really happy about1 en 3 zijneigenlijkgelinktAlser minder budget is, wel de goedebelonen!Als we kijkennaar de stijgingen, rond de 1,5%, nietvoldoendeomtemotiveren
  • 1= strongly disagree/2= disagree/ 3=undecided/4=agree/5=strongly agreeStarting from index limitation tendency that they agreeMobility budget = top suggestion? (Literally ‘sustainability’?)Seniority)based increase till Y6 =majority disagrees…seniority-based increase indeed not the ultimate solution to build the future reward building unless combined? (pay for performance and maybe limited till Y6)Pwc study, 2013: Aged 34 or younger: 40% are considering leaving
  • NG & Feldman, 2010in the case of in-role performance,organizational tenure contributed the most to performance when the range oftenure was between 3 and 6 years. In the case of OCB, the effect of tenure was strongest inthe first 3 years of employmentIn bothcases, organizational tenure has positive effects on performance, but at diminishing rates(cf. Table 4). Consistent with Sturman (2003), we found that the effects of tenure on performancestart to decrease somewhere between Year 3 and Year 6 and drop to virtually zeroaround 14 years of employment. In essence, as employees continue to learn and grow ontheir jobs, added years of service do contribute to increased job performance. However, onceemployees have learned their jobs, the incremental improvement in performance per year ofadditional service is smaller.
  • 1= strongly disagree/2= disagree/ 3=undecided/4=agree/5=strongly agreeStarting from index limitation tendency that they agreeMobility budget = top suggestion? (Literally ‘sustainability’?)Seniority)based increase till Y6 =majority disagrees…seniority-based increase indeed not the ultimate solution to build the future reward building unless combined? (pay for performance and maybe limited till Y6)Pwc study, 2013: Aged 34 or younger: 40% are considering leaving
  • 1= strongly disagree/2= disagree/ 3=undecided/4=agree/5=strongly agreeStarting from index limitation tendency that they agreeMobility budget = top suggestion? (Literally ‘sustainability’?)Seniority)based increase till Y6 =majority disagrees…seniority-based increase indeed not the ultimate solution to build the future reward building unless combined? (pay for performance and maybe limited till Y6)Pwc study, 2013: Aged 34 or younger: 40% are considering leaving
  • ParticipantsGDF Suez, Compensation & benefits manager (Fr)Barco, Global Comp & ben specialist (Bel)NordeaBank, Compensation specialist (Zweed)Tetra Pak, VP HR (China & Zwitserland)Nog iemand van NederlandBekaert, Global comp&ben manager (Bel)
  • The Reward Barometer

    1. 1. THE REWARD BAROMETER: TRENDS & PROJECTS SHAPING TODAY’S REWARD MANAGER’S AGENDA IN 2014 AND BEYOND FEMKE DHONT, CENTRE FOR EXCELLENCE IN STRATEGIC REWARDS
    2. 2. 1 METHODOLOGY
    3. 3. SURVEY Questionnaire 17 December 2013– 25 January 2014 43 companies All sectors 4 © Vlerick Business School
    4. 4. COMPANY SIZE Number 3% 7% 7% 14% 69% 0-200 201-500 501-1000 1001-2000 More than 2000 5 © Vlerick Business School
    5. 5. BUILDING BLOCKS Current reward practices 6 © Vlerick Business School Strategic importance & satisfaction Reward Trends in 2014 Reward building of the future
    6. 6. 2 CURRENT REWARD PRACTICES
    7. 7. REWARD FRAMEWORK 8 © Vlerick Business School
    8. 8. DO YOU HAVE A FORMAL REWARD STRATEGY? ‘Reward strategy is ultimately a way of thinking’ 100% 80% (Brown) 60% 40% 2013 2009 20% 0% Yes © Vlerick Business School No, but planning No, not planning
    9. 9. WHICH FACTORS DETERMINE BASE PAY PROGRESSION? 100% 80% 60% 40% 20% 0% % of respondents 10 © Vlerick Business School
    10. 10. WHICH FACTORS DETERMINE THE PAY-OUT OF INCENTIVES? 100% 80% 60% 40% 20% 0% % of respondents 11 © Vlerick Business School
    11. 11. 3 STRATEGIC PRIORITIES & SATISFACTION
    12. 12. STRATEGIC IMPORTANCE VERSUS SATISFACTION Satisfaction 5.50 Keep 1 – Diversity 2 – Recruitment 3 – Retention 4 – Grading 5 – External Equity Good Job 5.25 2 1 5.00 4 3 5 4.75 9 Areas of concern 8 4.50 6 4.25 4.25 4.75 © Vlerick Business School 10 7 5.25 Highest priority 5.75 Strategic Importance 6.25 6 – Competence management 7 – Workforce Planning 8 – Internal Equity 9 – Performance Management 10 – Cost Management 6.75
    13. 13. HIGHEST PRIORITIES 14 © Vlerick Business School
    14. 14. 4 REWARD PROJECTS FOR 2014
    15. 15. TOP OF MIND IN 2014 16 © Vlerick Business School
    16. 16. WHAT WILL BE ON THE AGENDA THE COMING YEARS? TOP Reward Projects 2014 Reward Communication Short-term Incentives Performance Management Base Pay Flexible Benefits Car Policy Pension & Group Insurance Long-term Incentives Work-Life Benefits 17 © Vlerick Business School
    17. 17. CONCLUSION – CHALLENGE FOR 2014 Make rewards… 18 © Vlerick Business School
    18. 18. 5 THE REWARD BUILDING OF THE FUTURE
    19. 19. Indicate to what extent you agree that the following suggestions are sustainable elements for the reward building of the future © Vlerick Business School
    20. 20. BASE PAY – EVALUATE THE FEASIBILITY OF THE FOLLOWING SUGGESTIONS.. Increase based on individual performance Seniority-based increase Increase till mid-Point Competence-based increase Seniority-based increase till Y6 Index limited to the first 3500 euro gross Only indexation as increase © Vlerick Business School
    21. 21. WHATS DOES THE LITERATURE SAY ABOUT SENIORITY-BASED PAY? Tenure and performance are positively linked, but At a diminishing rate Y0 – Y3: positive effect Y3 – Y6: decreasing positive effect Y14 - …: zero effect  Rationale for ‘light’ seniority-based pay till certain seniority level 22 © Vlerick Business School (NG &Feldman)
    22. 22. VARIABLE PAY – WHAT DO YOU THINK ABOUT THE FOLLOWING SUGGESTIONS? Profit Sharing Systems Target bonus as fixed amount Participation in Shares © Vlerick Business School
    23. 23. EMPLOYEE BENEFITS – YOUR THOUGHTS ON THESE IDEAS? DC plan based on reference salary Mobility Budget © Vlerick Business School
    24. 24. MORE INFORMATION? Femke Dhont – Programme manager Femke.dhont@vlerick.com + 32 (9) 210 97 64 FemkeDhont www.vlerick.com/strategicrewards © Vlerick Business School 25

    ×