Key principles of re-designing benefits and rewards
As the workforce becomes increasingly multi-generational and the advent of technology plays its part in reshaping employee expectations, talent leaders, and compensation and benefits experts are turning to new-age incentives that would create a holistic employee experience.
It is time for total rewards experts to examine the pre-existing policies and assess the new demands and needs in order to come up with a wholesome talent strategy that is not only flexible enough to incorporate different kinds of employees across various age groups and backgrounds, but also, keep in mind the changing demands of the digital economy.
During a webcast hosted jointly by People Matters and Sodexo, Lipika Verma, Director--Rewards, Global SupplyChain, Schneider Electric, shared her insights into designing new-age incentives keeping employee experience at the center.
With more than 140,000 employees present globally, 20,000 of whom are based out of India, Schneider Electric has focused on ensuring that new-age incentives work in tandem with employees’ motivation to work.
Suvarna Mishra, VP – Human Resources, Sodexo BRS India, also shared some of the ways in which HR leaders can leverage the right kind of technology in order to create a holistic employee experience through the total rewards and wellness lens.
“Employee experience is defined by every interaction that you deliver at your workplace, to keep employees happy at the workplace and beyond,” said Mishra.
According to a survey conducted by Sodexo, some prevalent attitudes towards the workplace vary among Gen Zs and Baby boomers. Both the age groups are of the opinion that despite of all the transformations going on in the digital age, the experience essentials viz surrounding health, personal growth, sense of connectedness, and the need to perform effectively and productively in the workplace are the fundamental needs.
Simultaneously, workplace enhancers are the ones that foster deep connections among employees and managers and create a bond with their workplace thus encouraging loyalty towards the employer brand.
An effective rewards strategy is an interplay between four factors:
External Competitiveness: where do we want to place ourselves as an employer brand
Financial Consideration: where do we want to focus more on compensation and benefits
Talent Strategy: the rewards strategy and the holistic talent strategy has to “talk to each other.”
Employee Preference: This era of multi-generational workforce exposes HR professionals to a workforce that has different kinds of aspirations and needs.
The key is to cope with the varying demands and requirements of all employees. Incorporating the employee preferences into the rewards strategy early on can ensure that during the implementation stage there is a buy-in from the employees and in-turn various other stakeholders in the organization--which is crucial for a successful rewards strategy, according to Verma.
Components of Total Rewards
The entire spectrum of total rewards includes: Compensation, Benefits, Development, Environment. Rewards are usually divided into individual rewards and collective rewards.
The Compensation and Development aspect of rewards falls under the individual category. From a sound base pay to short term incentives, equity participation and recognition to developmental opportunities in terms of receiving constructive feedback from the managers, continuous learning opportunities and a future-ready track where the employees see themselves progressing in their career.
Conventional benefits such as health, welfare, retirement, time-off are considered as a basic hygiene check in this day and age where the work environment, work culture, organizational structure, flexibility, agility within the company to experiment with new projects, etc. are all a part of the collective rewards.
Benefits in tandem with employee journey
The traditional drivers for employees have been social security, monetary employees, and organization-focused rather than employee-centered. Even though risk mitigation is the most crucial aspect from a financial standpoint, however, if an organization is looking at the long-term development of its employees, then, keeping the employee’s needs at the center would reap more benefits.
At present, compensation and benefits’ leaders are looking beyond monetary aspects and aligning the business requirements with their benefits strategy as well. Many employers are now looking at benefits as a way to attract, retain, and engage top talent. In a way, along with the benefits and career development opportunities, new-age companies are wanting to make their mark and stand out as a coveted employer brand.
The employee life-cycle in the company has a major impact on the kinds of benefits she or he would be looking at. Across all the groups, be it from the time that an employee enters the workforce, to factoring in the life-events such as marriage or parenthood, in addition to becoming care-givers to ailing parents and entering the retirement phase themselves. That’s precisely why, talent leaders have to create an incentives plan that can be flexible enough for employees at different stages of their career and life-cycle.
“There are three parties involved when it comes to catering the wellbeing of the employees. It is the individual’s responsibility, it is the leader’s responsibility as well as an organizational responsibility,” said Lipika Verma. “They all have to come together through a collective journey.”
Flexibility at work
Leadership buy-in and organizational culture are the two major pillars that are instrumental in ensuring that there is flexibility and agility in all areas of work. Well-being of an individual encompasses several different aspects ranging from monitoring the workload, taking preemptive measures to prevent burnout through facilities such as a sabbatical, work-from-home options, etc. Inculcating a culture that encourages an open dialogue between managers and employees can help alleviate stress levels and put in place an efficient and balanced working policy.
Contributing to a social cause and enabling employees to care about the well-being of the society is also a part of the new-age incentives plan that creates a better employee experience, Lipika added, talking about the need for a robust Corporate Social Responsibility system.
Having taken a look at how new-age incentives can drive productivity in the workplace, here’s a wrap up with the key guiding principles of designing a versatile rewards and wellness plan in line with the overall talent strategy:
Key guiding principles
- Catering to a multi-generational workforce
- Offering plenty of choice and inculcating flexibility
- Accounting for employees’ life-cycle
- Motivating work-life integration
- Ensuring that employees have clarity about their development goals
- Recognizing successes and appreciating the learnings
- Leveraging the right kind of technology
- Constantly communicating between employees and the leadership regarding any changes, modifications, additions, etc.