Case study: Rewards beyond salary
Over the past decade, the business environment is changing, and it now faces greater uncertainty in the COVID-19 period which is far from being over. Businesses have to deal with both - the economic crises with fluctuations in commodity pricing, complicated logistics as well as the health crises which have transformed the ways of working as we move towards Future of Work - hybrid models, new policies… all this while managing top-line, margins and profit.
The talent landscape today is also competitive. India’s rising unicorns, the mental & emotional turmoil that followed the pandemic are making the workforce eager to make the switch in pursuit of change or a better life leading to the ‘Great Resignation’. This has made hiring, engaging, and retaining top talent crucial and challenging for the organizations.
Reckitt is a British multinational consumer goods company behind well-known brands like Dettol, Strepsils, Air Wick, Lysol, and Durex. In addition to being one of the fastest-growing consumer goods companies in India, the company’s role and operations gained a heightened sense of importance and urgency owing to the public health crisis caused by the Covid-19 pandemic.
The company’s Head of Rewards, Deepa Chaudhari, explains what unique reward systems have been created to build a sustainable business for employees, customers, and shareholders.
Thinking beyond financial incentives
Reckitt strives for outperformance and they compete to attract and retain talent in a competitive landscape. Central to their Reward philosophy are the principles of pay for performance, and shareholder as well as strategic alignment. Combined with Reckitt’s compass and business model, they define how decisions are made, how people act and how they are assessed and rewarded.
Here are some ways in which Reckitt is trying to navigate these challenges using a strong rewards and incentives model that goes beyond salary.
- Strengthen core values: At the heart of Reckitt’s compass is the motto “do the right thing”. Conscious efforts are made towards being a fair-wage and equal-pay employer, that promotes sustainable business. The company has designed extremely incentivizing remuneration policies that stand out in the industry for their high-up side of variable pay on excellence in performance. By design, the variable plan drives strong performance with a significant reward for overachievement of annual targets linked to Reckitt’s strategic priorities and aims to achieve collaboration.
- Focus on Talent: Engage performance-driven employees with great career opportunities by giving them new experiences, leadership opportunities, networking, development opportunities, and supporting them in becoming great professionals and managers. Given the need of the hour, Reckitt deepened the range of support provided to the employees and consciously tried to be more nimble, open, and responsive to change. The company has addressed the changing needs of the workforce and catered to the motivations, expectations, and well-being of its employees.
- Market-leading Share Ownership Policy: Reckitt has a market-leading and awarded share ownership policy for employees that is centered around an important Compass value of “Building Shared Success” The plan effectively engages wider workforce and instills a sense of ownership & pay for performance.
All full-time employees in India can make regular savings contributions (from £5 to £500, or equivalent to local currency, per month) over a period of three years with an option to purchase Reckitt shares at a discounted price at the end of the duration. Employees can also receive the profit accrued over the time in cash or company shares. Interested employees can enroll and manage their plans online easily. Since the savings are deducted directly from the salary, there are no missed installments or late payments to worry about once the saving account is set up & linked.
In addition to getting discounted shares at the end of the duration, employees benefit when the company share price rises. This is also a risk-free option as every employee will get back the principal sum invested, plus the interest at the least.
The program has received a very positive response from the employees, and testimony to that is more than half of them have opted in the plans across the years. In addition to giving employees a true sense of ownership, it also incentivizes them to work better and generate better results by reinforcing a strong sense of collective ownership & building Shared Success!
John Ruskin, the English writer, and philosopher, once said, “The highest reward for a person's toil is not what they get for it, but what they become by it.” And this philosophy is visible in Reckitt’s reward policies and programs as the company enables its workforce to take on the most pressing challenges in our world.