Article: Reforming the rewards scenario - EY Rewards Survey 2016

Benefits & Rewards

Reforming the rewards scenario - EY Rewards Survey 2016

Compensation and benefits alone do not makeup total rewards; work-life effectiveness and talent development are becoming significant areas of focus for employees. A look at the distinct themes of the EY Rewards Survey 2016
Reforming the rewards scenario - EY Rewards Survey 2016

Employees must be considered as customers of reward programs


Organizations are taking a blinkered approach to implementing flexibility in rewards, by failing to frame policies that are gender-neutral


The present day workforce is extremely dynamic, but many employers have held on to archaic approaches to managing talent. On the subject of employee rewards more specifically, employers continue to rely on traditional benchmarking reports that report ranges, prevalence and quantum of compensation and benefits. While these do provide some statistical inputs, they fail to capture the pulse or the mood of employees and employers alike. 

The EY Rewards Survey 2016 was conducted with a view to capture employers’ perception of what they believe they are doing ‘right’ and to understand how well these initiatives or programs are received by employees. The survey invited views from employers and employees across 12 industries and saw the participation from 128 employers and 452 employees. Consistent gaps were observed between the perception of employers and the preferences of the employees, the responses for which can be clubbed under the following themes:

  1. Understanding and communication of the rewards program
  2. Tailoring the rewards program according to the employee demographics in an organization
  3. Relevance of various components of the rewards programs in today’s work environment

The survey also suggested the way forward in order to mitigate the gaps. We explore the distinct themes in more detail here:

Expectations from rewards program

An organization’s vision, mission and strategy contribute to support the construction of a rewards program. However, with increased diversity in the workforce, attention must be paid to employee level input. Employees have been telling organizations what they need from a rewards program for a long time. But are employers really listening to what employees have to say?

Organizations should consider whether they have a firm grasp on the composition of their talent pool demographics. The understanding of demographics must extend beyond knowing skill and gender diversity. There is a wealth of employee data to be gathered from age, life-stage, performance, knowledge and experience – this information can provide insights to support the composition of a more robust rewards program.Employees must be considered as customers of reward programs. It will hold employers in good stead to understand employee preference to a list of various reward elements in isolation and as trade-offs. This will present employers with concrete data that can help structure rewards program as per employee preferences. A well designed rewards program assures employees that the employer holds their well-being at the heart of the organization’s rewards philosophy. 

Therefore it’s important to know employee pulse!

A contemporary and relevant rewards program

Organizations have a finite budget to attribute to their Rewards program, and it is best that such a program is contemporary and relevant. In the last 18 months, India Inc. has been increasing its focus on benefit programs. There is a quiet revolution underway, fuelled by the emerging need for diversity and inclusion in organizations. Initiatives have been seen largely in the areas of parental leave policies and physical health wellness. Considering that employees spend 8-10 hours at the workplace, we must question what is being done to address the holistic wellbeing of employees. Are programs aimed to help employees manage mental, financial and spiritual wellness? Are wellness programs a mere tick-in-the-box initiative or are employers actively tracking participation and results? Have employers accounted for age and life-stage demographics of their workforce and considered restructuring the compensation structure?

Compensation structures and benefit portfolios in traditional industries in India continue to reflect a legacy that was passed on through their formative periods. The new-age businesses are challenging this mind-set by introducing new benefits that have piqued the interest of the talent pool. 

To attract all forms of diversity required in an organization it is time to explore alternative reward instruments.

Flexible rewards program

There has been a clear and visible shift in the way businesseswoo consumers with a high degree of customization for products and services. However, this isn’t reflected in the rewards programs for employees who help execute the business plans. 

Organization are taking a blinkered approach to implementing flexibility in rewards, by failing to frame policies that are gender-neutral. Case in point: Is there merit in converting maternity and paternity leave into parental leave, with specifics detailed for the father and the mother?

It’s an appealing logic to follow that will encourage men to offer more support back home and hence motivate women to step out.

The barrier to offering flexibility in rewards is usually administration. There is sizeable investment of resources in understanding, designing, negotiating and monitoring flexible reward arrangements. There are various models in play, including points system that allocates points to employees and allows them to choose from an array of reward components that best suit their needs. The need of the hour is to think outside the box and design models that best suit the employer’s purpose and demographic.

There is a solid business case to review and customize your rewards program.

The difference in perception

An effective rewards program 

Reward programs steer employee behaviour towards desired outcomes. With this as a premise, reward practitioners should measure the impact that reward programshave in achievement of end results. This can be defined in a number of ways and is usually contextual for an organization. Measurements such as compa ratio, compensation spend per rupee of profit, compensation spend per rupee of revenue, increase in sales, performance of employees paid in the top quartile of pay range of their band, utilization of rewards program by target segment of employees, engagement levels, absenteeism  are possible measures and help in building a metric-based story.

Measuring the outcomes of reward programs also help organizations to fine-tune them and offer relevant components with the right quantum. The information will also help organizations design appropriate communication for target segments. 

Just as with any investment, it is important to track the ROI of a rewards program.

Communicating reward programs

Organizations have typically positioned compensation as the hero of the reward program. This is reflected in the EY Rewards Survey where we asked employers and employees to list the top five elements that are important for an effective work environment – competitive pay in terms of monthly take-home came out on top for both groups. 

This emphasis is rightly so - economic gain  is after all the primary reason for an individual to engage in any form of economic activity. However, while competitive pay is the primary element that attracts talent to an organization, it doesn’t remain the most important element that continues to motivate, engage and retain talent. Benefits, talent and performance development programs, work-life efficiency initiatives are typically run as singular programs that fail to converge to show employees the big picture. Employees might know about these programs but do they understand their true worth?

A measure of success of a rewards program can be whether or not employees are able to articulate benefits they derive from their organization’s program. Employer can help by consistently communicating various programs. They should, however, refrain from mass communication and customise the message to reflect the needs of various demographic segments in the organization. Total reward statements are an example of an effective tool to personalise communication. Road-shows, focussed group discussions are ways to not only disseminate information but also understand employee reaction to reward programs.

Effectively communicating the value proposition of a rewards program will enhance employee knowledge and utilization.


We believe there is immense opportunity to enhance engagement of employees in most organizations, and rewards are a very important lever. Employers must seek to nurture programs that truly reflect the organization’s intent and core values. It is important that employers understand the pulse of the organization and truly ‘listen’ before initiating a program. Another aspect to enhance the positive perception is to ensure effective communication of the rewards program. Communication must be simple and crisp and should speak the language of the target audience. Finally, all employers must scientifically track the effectiveness or success of their reward programs. 

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Topics: Benefits & Rewards

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