Article: Rewards Special: Segmentation & Differentiation

Compensation & Benefits

Rewards Special: Segmentation & Differentiation

Puneet Swani ASEAN Business Leader Information Product Solutions, Mercer

In the coming year, there will be a clear focus on pay for performance, workforce segmentation and employee productivity.
In terms of salary hikes, the double digit salary increase, which we witnessed some years ago, has lowered continuously. Today, salary increases in India are more in the range of 12-13 percent depending on the industry one belongs to. While salary increases will be seen across sectors, there will be a visible difference in the manner the increase is distributed. With limited budgets, organizations are increasingly differentiating high performers from average performers. If the increment for an outstanding performer is 20 percent, then an average performer may be given an increase in the range of 10-12 percent. Companies have significantly raised the bar of their acceptance of low performance.

The second trend on workforce segmentation articulates the need to draw a strong linkage in rewards and the type of workforce. Gen X, or Gen Y, there will certainly be changes in structuring of pay packages and the flexibility around those pay packages. The expectations and priorities of a younger workforce are different from other groups who are in their middle age. Organizations are now providing flexibility to employees to choose flexible compensation and flexible benefits. Flexible compensation plan - whether it is LTA, insurance and conveyance where you get maximum tax exemption. Flexible benefits - organizations are moving into flexi dollar spend or rupee amounts spend, meaning an employee is given an overall amount as kitty and he chooses the benefits, which fit his/her lifestyle, while keeping the overall spend to the amount given to him. From a rewards perspective and in terms of career, we are seeing employees demanding more career growth and at a much faster pace. Lateral movement of employees for exposure to different business functions and job rotation are increasing, as these are linked to career development and promotions. In a recent ‘What Working Study’ undertaken to examine employee views on work, conducted by Mercer among more than 2,000 workers in India, the findings showed that:

• Out of 13 possible rewards elements, India respondents say that career advancement is their most important rewards element. Further, career advancement was the top most priority in the age group of 25-34
• Base pay is the second most important reward, which also emerges as more important to older workers and non-management
• Training opportunities followed by type of work were rated third and fourth, respectively, as most important rewards for workers in India
• Indian workers place a great deal of importance on working for a respectable organization, which is listed as their fifth highest rewards element followed by bonus or incentives

Ratings are a key part of performance management. As ratings are linked to the payouts employees get, organizations are beginning to focus on the reliability of the performance rating, which is linked directly to the performance of the organization and which is linked to the final payout. There is an increasing trend we see in corporates around adoption of wellness programs. A large number of BPOs, or IT firms, are spending money to enhance productivity of employees by popularizing health check-ups and health clinics, in order to avoid absenteeism.

We have a comprehensive rewards offering, which is backed by local expertise, our proprietary tools and methodologies. Most importantly, our products and services are aligned to different types of organizations. Within the rewards space, we offer services, such as annual compensation survey, or annual benefits survey, which is done on industry basis. We also consult clients on broad-based rewards, which would include advising on compensation structures and design, job or position evaluation and creating flexible benefits and compensation plans. Mercer has a specialized team working on global mobility and expatriate compensation. The cost of living is different for every country. We work with organizations to design appropriate compensation packages, which would be country specific. We also help organizations create policies for expats. Additionally, we create several publications, which offer global insights such as Quality of Living report and Cost of Living report. Our superior technology solutions enable products such as the salary survey, which can be accessed online, customized and downloaded. We have similar tools that help organizations undertake online job evaluation and scenario planning that help creating salary structures.

At Mercer, the real differentiator is our ongoing endeavor to help clients optimize the value of their human and financial resources.

We are a leading global human resource firm offering Indian businesses access to Mercer proprietary global practices and methodologies, backed by strong local knowledge, expertise and experiences. It is the wealth of data and local experience, Mercer has to offer. Across Asia, we are the only firm that has local presence across the region. We have the local reporting and understanding, and that is unique to us.

Mercer has strong industry focus and our methodologies are consistent across every country in the world. It is all about consistency in application of those methodologies.

We have an integrated solution offering, which reinforces our commitment towards enhancing workforce capabilities. We recognize that talent defines an organization and that all aspects of a talent strategy, including strategy design, implementation and technology, must be considered and connected to other HR programs.

We also have a distinctive combination of local and expatriate talent worldwide. We are very proud of the team and the people we have, which makes Mercer a totally different space.
 

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Topics: Compensation & Benefits, Strategic HR, #Trends, #HRIndustry, #TotalRewards

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