There will be a paradigm shift in the way Total Rewards is perceived as a whole. Compensation and benefits need to be seen as part of a broader framework of the Employee Value Proposition (EVP) and has to be nailed to the talent strategy of the company, which in turn is linked to performance ultimately.
Going forward, there will also be more focus on segmentation. Looking at the diversity within organizations, in terms of gender, age, etc., the expectations of each of these groups are different; therefore, C&B has to mean clear segmentation and flexibility. This segmentation already exists in many organizations, but will become sharper in 2012.
Another trend that will come up will be more and more transparency in terms of the total value. What will differentiate organizations is the ability to leverage technology-based portals, calculators and simulators to empower employees to make use of their benefits, the way they want to.
P&G has launched a program called “My Pay My Choice”, which is intended to empower and provide flexibility to the employee for making a choice to meet his unique needs. This is a clear instance of leading the industry by practice and not necessarily in terms of value.
A unique example of our ‘best in class’ systems is our technology enabled compensation planning system. This truly makes our compensation philosophy operational, by empowering the manager to plan his employee’s salary over the long-term, keeping his employee’s unique conditions in mind. As part of this, every employee has a salary plan that looks at the next and subsequent two increments.
In 2003, P&G outsourced its end-to-end HR services to IBM. We have truly been the pioneers in this area. All our HR services, like data management, compensation, relocation and benefits administration are managed by external partners. At a market level, we work with Aon Hewitt and Ghosh Khanna & Sons for our retiral trust administration.
Our choice of vendors is largely influenced by the vendor’s capacity to scale up. We are a global company and the vendors we look at should have the ability to innovate locally as needed and integrate globally. When we enter a contract with a vendor, we look for a long-term relationship and partnership; therefore, they should have strong controls and stewardship processes.