Employee Value Proposition and Total Rewards: Modernize or Risk Irrelevance · Modernizing your...
Transcript of Employee Value Proposition and Total Rewards: Modernize or Risk Irrelevance · Modernizing your...
Employee Value Proposition and Total Rewards:
Modernize or Risk Irrelevance
September 13, 2017
© 2017 Willis Towers Watson. All rights reserved. Proprietary and Confidential. For Willis Towers Watson and Willis Towers Watson client use only.
Kate Hubben, Client Advocate
Willis Towers Watson
About the 2016 studies
Fielded April – June, 2016
▪ 29 markets globally
▪ 2,004 employer
respondents representing
>21 million employees
▪ 21st annual survey
Key topics covered:
▪ Attraction and retention
drivers
▪ Talent mobility and challenges
▪ EVP and total rewards
▪ Leader and manager
effectiveness
▪ Career management
▪ Performance management
▪ Pay for performance
35%
21%
18%
26%
2016 Global TM&R Study
Asia Pacific EMEA
Latin America North America
Key topics covered:
▪ Attraction and retention
drivers
▪ Drivers of sustainable
engagement
▪ Leader and manager
effectiveness
▪ Career management
▪ Performance management
▪ Health, stress, wellness
▪ Communication
Fielded April – May, 2016
▪ 29 markets globally
▪ >31,000 employee
respondents
Global Talent Management &
Rewards Study (TM&R)
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Global Workforce Study
(GWS)
Modernizing your Employee Value Proposition and Total Rewards
Discussion outline
Setting the Stage
▪ What’s driving a modernization agenda
▪ Talent market context
▪ What it all means
▪ The Modernization Agenda
▪ The ROI on Getting it Right
Understanding the Drivers of Attraction, Retention and Sustainable Engagement
Modernizing your EVP
▪ Effective Leaders
▪ Work, Stress and Wellness
▪ Performance Management
▪ Total Rewards
Anticipating the Future of Work
Conclusion
Additional Information
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Conclusion
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Setting the Stage
The Modernization AgendaGetting it right
Effective Leaders are Critical to a Compelling EVP
Addressing the Work Component of the EVPEmployers need to focus on workplace stress and wellness
Achieving Effective Performance Management
Implications for Total Rewards
Future of WorkEffective management of work types, channels and options is part of the modernization agenda
Additional Information
Modernization, relevance and what’s at stake
Creates increased pressure and stress on the workforce and a whole new
definition of what it means to be a leader
Market trend/reality
Expectations of transparency and individualization
Fast-changing technology
Demographic shift – It’s really happening
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Fast-changing market
Challenges attracting employees in key workforce segments
remain high overall
Even more so for organizations operating in emerging economies
Mature Markets Emerging Markets
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28%
45%
55% 54% 56%
44%
57%
66%
77% 76%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
All employees Diverseemployee
populations
Critical-skillemployees
High-potentialemployees
Top-performingemployees
All employees Diverseemployee
populations
Critical-skillemployees
High-potentialemployees
Top-performingemployees
Attraction Challenges
Nearly half (48%)of employers report
hiring activity increased
Retaining key employee groups remains difficult, especially in
emerging markets
Mature Markets Emerging Markets
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Close to three quarters of employers have trouble retaining high potentials
20%
28%
37%
47%44%
41%
47%
59%
70%65%
0%
10%
20%
30%
40%
50%
60%
70%
80%
All employees Diverseemployee
populations
Critical-skillemployees
High-potentialemployees
Top-performingemployees
All employees Diverseemployee
populations
Critical-skillemployees
High-potentialemployees
Top-performingemployees
Retention Challenges
One-third (35%) of employers report
turnover activity increased
The cost of turnover puts significant value at risk
Job LevelFinancial cost of turnover
(% of annual compensation)*
% of ee’s at high
risk of turnover**
Financial cost
at risk***
Senior Manager/Executive 74% 31% 23%
Professional 59% 25% 15%
Sales & Customer/Client
Management59% 27% 16%
Business Support 48% 27% 13%
Lost productivity
Hiring
Training
Job vacancy
Probability of turnover
Financial cost at risk
Financial cost of
turnover
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*FCOT measured in our proprietary benchmark database
**% at risk of turnover from 2016 Global Workforce Study ***Financial cost at risk=FCOT*% at risk of turnover
Needed: A modernization agenda to address the challenges of
today’s workplace and remain relevant
The Modernization Agenda – companies need to:
Be agile and nimbly respond to changes in business strategy and talent markets
Introduce flexibility into talent and reward plan design and delivery
Improve transparency in reward programs
Tailor programs to key segments of their workforce
Leverage technology to digitally engage employees
Transition from job security to relevance (career security)
Address work place stress
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Modernizing also means getting the EVP right
Have formally articulated their EVP that is clearly aligned with what they stand for
in the marketplace, and differentiates them from other organizations with whom
they compete for talent
Understand their employees and potential candidates the same way they would
understand their external customers
Customize their EVP for employees with critical skills
Effectively communicate and deliver their EVP, leveraging technology
to understand employees and communicate differentiated messages
to them
Best practice EVP companies:
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Conclusion
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Setting the Stage
The Modernization AgendaGetting it right
Effective Leaders are Critical to a Compelling EVP
Addressing the Work Component of the EVPEmployers need to focus on workplace stress and wellness
Achieving Effective Performance Management
Implications for Total Rewards
Future of WorkEffective management of work types, channels and options is part of the modernization agenda
Additional Information
Modernizing your EVP should be accomplished in the context of an
overarching human capital framework
Leadership
Measurement, Change Management, Communication and HR Technology
EVPEmployee Value
Proposition
Desired Culture
Human Capital
Strategy
almost 3x as likely to report their
employees are highly engaged
93% more likely to report significantly
outperforming their industry peers
financially
27% fewer regrettable new hires
in the first year
More than 10% less likely to report
difficulty attracting and retaining key
employees segments
OutcomesHuman capital dimensionsBusiness strategy
17% lower voluntary turnover
Best practice EVP companies achieve better outcomes
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Getting it right starts with understanding the top drivers of
attraction
Rank
1 Base pay/salary Career advancement opportunities
2 Job security Base pay/salary
3 Career advancement opportunitiesReputation of organization as a great place to work
4 Challenging work Challenging work
5 Opportunities to learn new skills Job security
6Reputation of organization as a great place to work
Organization's mission, vision and values
7 Health care and wellness benefits Opportunities to learn new skills
▪ Companies understand the importance of competitive base pay, career
advancement opportunities and challenging work
▪ But they overestimate the importance of their mission and values and do not
place enough emphasis on job security
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Employer ViewEmployee View
Comparing top drivers of attraction
You also need to understand why employees would choose to
leave your organization
Rank
1 Base pay/salary Career advancement opportunities
2 Career advancement opportunities Base pay/salary
3 Physical work environment Relationship with supervisor/manager
4 Job security Ability to manage work-related stress
5 Ability to manage work-related stress Opportunities to learn new skills
6 Relationship with supervisor/manager Flexible work arrangements
7 Trust/Confidence in senior leadership Short-term incentives (e.g., annual bonus)
▪ Companies understand the importance of competitive base pay and career
advancement opportunities
▪ But they do not acknowledge the importance of the physical work environment
and job security
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Employee View Employer View
Comparing top drivers of retention
Group
Fearful
Stable and
steady
Financially
concerned
Making a
career of it
In a good
place
Key
characteristic
Don’t want to
lose my job
Don’t want my job
to change
Don’t want to lose
my paycheck
In it for the long
haul
I’m happy, for
now
Employers
can offer
Career Security
through training
to remain
relevant in the
new market
Integrated
Performance
Management to
help employees
to adapt to
changing
workplace needs
Alternative work
arrangements to
allow employees
to do same tasks
for more than one
employer
Total Reward
programs
redesigned to help
employees
with concerns
about budgeting
and financial
planning
Leadership and
managers who
support an
innovative
culture
Greater use of
pay programs
with emphasis
on LT payoffs
(Career
Management,
LTI, Pensions)
Pay for
performance
and skills
Training for high
valued skills to
remain relevant
in marketplace
Job security and the modernization agenda are not irreconcilable
Job security is a top driver of attraction and retention, but can mean different
things to different people
*Percentages represent those who selected job security as a driver of retention and who fall into this group.
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26% 24% 22% 10% 19%
To achieve desired outcomes, companies must address the drivers
of sustainable engagement
Sustainable Engagement Drivers
Rank 2016 2014
1 Senior Leadership Senior Leadership
2 Clear Goals & Objectives Clear Goals & Objectives
3 Supervision Workload & Flexibility
4 Image & Integrity Image & Integrity
5 Workload & Flexibility Empowerment
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What is Sustainable Engagement?
▪ Engagement – Rational, emotional and behavioral attachment to the company
▪ Enablement - A local work environment that supports productivity and performance
▪ Energy - Individual physical, interpersonal and emotional well-being at work
Sustainable engagement pays dividends...
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but only one-third of employees are highly engaged
▪ Research shows that companies with high levels of
sustainable engagement outperform those lacking
energy and enablement
37%
17%
21%
25%
Global
Highly Engaged: Those who score high on
all three aspects of sustainable engagement
Unsupported: Those who are traditionally
engaged, but lack enablement and/or energy
Detached: Those who feel enabled and/or
energized, but lack a sense of traditional
engagement
Disengaged: Those who score low on all three
aspects of sustainable engagement
-13.3%
1.9%5.2%
-20%
0%
20%
12-month change in gross profit margin vs. sector
Highly engagedDisengaged Unsupported
Conclusion
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Setting the Stage
The Modernization AgendaGetting it right
Effective Leaders are Critical to a Compelling EVP
Addressing the Work Component of the EVPEmployers need to focus on workplace stress and wellness
Achieving Effective Performance Management
Implications for Total Rewards
Future of WorkEffective management of work types, channels and options is part of the modernization agenda
Additional Information
In the modernization agenda, we (re)define the term “leader”
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However, what the leader leads is dependent on the role within the organization
The executive-leader:
▪ Makes sure the right things are done
▪ Engages others in building and driving the business
▪ Leads others while managing outcomes/results
▪ Fosters a broad culture of success and fulfillment
The manager-leader:
▪ Makes sure things are done right
▪ Engages others in getting the work done every day
▪ Manages the work/outcomes while leading others
▪ Creates a local environment for success and
fulfillment
Manager Executive
In simplest terms, a leader
is someone who leads –
not necessarily a specific role or title
(e.g., a manager or executive)
What makes a leader effective?
There are key areas of leadership effectiveness that are “universal”
Professional People
Pioneering
Handling a wide range of
people issues across teams and
functions. Interacting assertively
with people to achieve results.
Understanding and adapting to
the needs of others.
Impact created through:▪ Engagement
▪ Successful Teams
▪ Communication
Impact created through:▪ Managed Risk
▪ Service & Product Delivery
▪ Expert Reputation
Applies expertise and deep
knowledge. Uses strong
analytical and reasoning
capability. Investigates and
solves problems using
specialist expertise.
Driving success, change and
growth. Seizing commercial
opportunities and outperforming
competitors. Generating
imaginative solutions and a long-
term vision.
Impact created through:▪ New Product/Markets
▪ Organizational Transformation
▪ Organizational Growth
Based on our research, the requirements of the leader are guided by three performance factors and the
impacts needed from the leader
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Our research indicates that the emphasis on performance factors
changes, depending on leadership level
The emphasis
on certain
areas shifts
depending
on scope of
role in the
organization
Managers tend to focus more on the
professional side than other levels of leadership.
And the impacts they create are related more to
operational activities.
Successful Executives focus more on the pioneering
factor – but they don’t lose focus on professional or people;
they are still bringing their domain expertise to bear, and
industry leadership. Additionally, the people side of their role is
still a key area of focus.
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Manager Executive
Our organization develops leaders who will be able to meetchanging business needs
Strongly Agree/Agree
64%
So what are companies doing around leadership development?
Overall, there is room for improvement
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My organization makes effective use of a leadership competency model
Strongly Agree/Agree
61%
Currently have
46%
Which of the following HR technologies
does your organization currently have or
plan to add in the next year or two?
Leadership development
Plan to add in next year or two
35%
No plans
20%
Employees give senior leadership low marks on key aspects of
their role
Item Percent Favorable
How would you rate the job that senior leadership is doing to:
Grow the Business 52%
Manage Costs 47%
Develop Future Leaders 39%
Senior leadership behaves consistently with the organization's core values 52%
I believe the information I receive from senior leadership 50%
I have trust and confidence in the job being done by the senior leadership
of my organization48%
Senior leadership at my organization has a sincere interest in employees'
well-being 44%
Fewer than half (46%) of the next generation of leaders think
their organization does a good job of developing future leaders
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Less than 20% of employers are removing or redeploying blockers,
or using software for succession management
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Succession Management process: Employer view
Uses work assignments and talent movement to develop leaders 75%
Uses actual succession plans to fill vacancies 60%
Links our succession management process with other talent and reward
programs (e.g., performance management, compensation)38%
Uses psychometric tests to assess potential 28%
Uses software to enable succession management 18%
Removes/Redeploys "blockers" to provide development opportunities to top
talent16%
Succession management is a key enabler of developing future leaders. There’s a significant opportunity for employers to do more.
Employees give their immediate managers better marks than
senior leaders
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Given the importance of managers, there is still room for improvement
My immediate supervisor/manager: Employee view
Treats me with respect 72%
Assigns tasks suited to my skills and abilities 66%
Clearly communicates goals and assignments 55%
Encourages new ideas and new ways of doing things 54%
Listens carefully to different points of view before
reaching conclusions54%
Helps remove obstacles to doing my job well 52%
Is effective at differentiating performance between high and low
performers52%
Makes fair decisions about how my performance links to pay decisions. 48%
Has enough time to handle the people aspects of the job 46%
Coaches me to improve my performance 44%
The responsibility-respect mismatch: Less than half of all employees
think the role of the manager is respected
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Yet so much is expected of them, and having the necessary skills is the number one
facilitator of performance management
Which of the following are
facilitators of your
performance management
experience at your
organization?
The People manager role is
highly respected in my organization 45%
My line manager/
supervisor has the
necessary skills
42%
Lack of effective
feedback is the
#1 barrierto the performance
management experience
Managers
are spending
3 to 4 hours
per employee/year on managing
performance
Inadequate time
spent in their role as
people manager
So what does it take to be an effective leader?
Effective leaders demonstrate these key competencies
Source: Willis Towers Watson 2016 Global Workforce Study – Global.
Rank How effective is your manager at… Favorable*Not
Favorable*
1 Developing Talent (creating developmental opportunities, coaching
and mentoring, giving feedback) 56% 20%
2 Leading Change (identifying change needs, driving change,
addressing concerns) 54% 20%
3 Engendering Confidence and Trust (demonstrating reliability, being
open and honest, being consistent) 53% 20%
4 Building Effective Teams (forming teams, creating shared purpose,
identifying talent needs) 54% 19%
5 Displaying Entrepreneurial Spirit (perceiving subtle changes,
thinking boldly, pursuing opportunities) 54% 21%
6 Focusing on Customers (identifying needs, developing
relationships, developing solutions) 52% 20%
7 Articulating the Vision (communicating the vision, translating the
vision, showing commitment) 52% 21%
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Engagement levels are significantly higher among employees who rate
their managers favorably on these competencies
*Among those who answered favorably/unfavorably, percentage who are highly engaged
Conclusion
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Setting the Stage
The Modernization AgendaGetting it right
Effective Leaders are Critical to a Compelling EVP
Addressing the Work Component of the EVPEmployers need to focus on workplace stress and wellness
Achieving Effective Performance Management
Implications for Total Rewards
Future of WorkEffective management of work types, channels and options is part of the modernization agenda
Additional Information
Two-thirds of employers globally identify stress as the top
workforce health risk issue
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Source: 2015/2016 Global Staying@Work Survey
Stress (64%)
Lack of physical
activity (53%)
Poor nutrition (31%)
Lack of sleep (30%)
Stress (85%)
Unplanned absences
(45%)
Stress (74%) Stress (72%)
Lack of physical
activity (58%)Stress (44%)
Overweight/ Obesity (70%)
Lack of physical
activity (61%)
Overweight/ Obesity (45%)
Lack of physical
activity (52%)
Lack of sleep (30%)
Stress (75%)
Poor nutrition (50%)
Lack of physical
activity (46%)
Lack of physical
activity (45%)
Poor nutrition (36%)
Lack of sleep (31%)
Overweight/ Obesity (43%)
Overweight/ Obesity (47%)
Poor nutrition (41%)
Overweight/ Obesity (31%)
Presenteeism (35%)
Poor nutrition (30%)
Overweight/ Obesity (32%)
Presenteeism (23%)
Presenteeism (40%)
Global US Canada EuropeLatin
America Asia PacificRank
1
2
3
4
5
The employer role: Move from ‘pull’ (encouragement) to ‘push’
(driving change) gradually – build employee permission.
Trust: There is a strong connection between health engagement
and the broader employment deal. Address concerns on privacy
of personal information.
Social connections: Leverage worksite and
support interactions and competitions around
health. Important for managers to be effective
advocates of employer programs.
New technology: Use technology, peer groups
and personal communication to motivate action.
So what does it take to build a culture of health and well-being?
1
2
3
4
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Conclusion
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Setting the Stage
The Modernization AgendaGetting it right
Effective Leaders are Critical to a Compelling EVP
Addressing the Work Component of the EVPEmployers need to focus on workplace stress and wellness
Achieving Effective Performance Management
Implications for Total Rewards
Future of WorkEffective management of work types, channels and options is part of the modernization agenda
Additional Information
Performance management and “going ratingless” are in the spotlight
What are companies actually doing?
Is your organization planning to make any
of the following changes to your performance
management process?
Already
taken action
Planning to
take action
Considering
taking action
Neither
planning nor
considering
taking action
Focus on increasing frequency and improving quality
of performance conversations/dialogue between
manager and employee33% 23% 24% 19%
Using performance management to evaluate/measure
future potential28% 20% 25% 27%
Implementing new enabling technology (e.g., to
support crowdsourcing or enable mobile platforms)15% 16% 21% 48%
Eliminating performance ratings/scores entirely 8% 3% 15% 74%
Eliminating performance ratings/scores for performance
management but keeping for compensation purposes5% 4% 14% 77%
▪ Very few employers have gone or are considering going ratingless
▪ Most are focusing on having more and better performance
management conversations
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Employees continue to say that performance management –
as they experience it – is not very helpful
The extent to which you agree with the following statement: Employee View
People are held accountable for their performance at my organization 56%
The people who evaluate me have clear visibility of my performance on the job 56%
My performance was accurately evaluated in my most recent performance review 52%
My organization does a good job explaining our performance management process 50%
My performance reviews have helped me improve my performance 48%
High-performing employees in my organization are rewarded for their performance 46%
There is a clear link between my job performance and my pay 45%
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This represents a lost opportunity to address a top driver of
sustainable engagement: clear goals and objectives
While more favorable, employers are not enthusiastic about their
performance management process
The performance management process at your organization is effective at: Employer View
Aligning individual performance objectives with strategic business priorities 76%
Identifying high, average and low performers 74%
Reinforcing key organization-wide values and desired behaviors 73%
Providing a mechanism for differentiating rewards 70%
Driving high performance across the workforce 67%
Informing development needs and plans 64%
Providing a mechanism for determining talent program eligibility 60%
Encouraging employees to set stretch goals 60%
Creating a positive employee experience 51%
Clarifying accountability of specific roles 47%
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Just 47% of employers indicate that their performance management process is
effective at clarifying accountability for specific roles
Employers do not rate managers favorably in terms of their
effectiveness at performance management
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Managers are effective in the following aspects of performance management:
Differentiating performance between high and low performers 53%
Fairly reflecting overall performance in the employee’s final performance rating 50%
Working with employees to set appropriate performance goals for individual
performance49%
Fairly reflecting performance in pay decisions 49%
Identifying development opportunities 39%
Giving employees regular coaching and feedback on their performance 35%
Conducting career development discussion 30%
Driving the right degree of risk taking to enable innovation 22%
Over 75% of managers spend less than six hours per employee per
year on performance management
% of managers
2 hours or less per employee 27%
3 or 4 hours per employee 26%
5 or 6 hours per employee 22%
7 or 8 hours per employee 10%
9 or 10 hours per employee 5%
More than 10 hours per employee 10%
In the typical year, how much time per employee do
you spend on performance management, including any
time spent on the ratings calibrations process? The Math:On this critical process,
the typical manager devotes
time to performance
management equal to
0.2% of the hours a
typical fulltime employee
works in a year.
What falls through the cracks?
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Managers also say they spend too much time filling in forms…
The amount of time I spend on the performance
management process: Too little About right Too much
Collecting feedback from colleagues is... 24% 63% 14%
Ongoing conversations with employees about their individual
performance is... 19% 64% 16%
Helping employees set performance goals or objectives is... 19% 66% 14%
Understanding and using performance management
technology is... 18% 67% 15%
Year-end performance feedback sessions is... 18% 66% 16%
Participating in calibration sessions is... 16% 64% 21%
The process overall is... 15% 68% 17%
Completing forms is... 7% 69% 24%
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And not enough time on setting goals, collecting feedback and discussing
individual performance
There appears to be a sweet spot in terms of time invested in
performance management activities and desired outcomes
2 hours or
less per employee
3 or 4
hours per employee
5 or 6
hours per employee
7 or 8
hours per employee
9 or more
hours per employee
It is easy to get the information I need to update my direct
reports on key organizational changes 45% 60% 60% 67% 58%
Our annual base salary increases are effective at driving
higher levels of performance among my direct reports 37% 52% 52% 53% 49%
Our annual base salary increases are effective at
differentiating pay based on performance among my direct
reports 36% 52% 54% 61% 49%
Our annual incentives or bonuses are effective at driving
higher levels of performance among my direct reports 38% 57% 57% 61% 56%
Our annual incentives or bonuses are effective at
differentiating pay based on performance among my direct
reports 39% 55% 60% 59% 51%
Our formal performance ratings are effective at driving
higher levels of performance among my direct reports 39% 52% 56% 57% 50%
Our performance management system is effective at
differentiating performance among my direct reports 38% 58% 60% 66% 55%
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Outcomes reported by managers vary based on how much
time they spend per employee per year on performance management
Conclusion
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Setting the Stage
The Modernization AgendaGetting it right
Effective Leaders are Critical to a Compelling EVP
Addressing the Work Component of the EVPEmployers need to focus on workplace stress and wellness
Achieving Effective Performance Management
Implications for Total Rewards
Future of WorkEffective management of work types, channels and options is part of the modernization agenda
Additional Information
Modernizing Total Rewards means challenging conventional thinking
Traditional approach New reality
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Employees never discuss pay and
benefit details with each other
“Living out loud” on Glass Door;
emerging legislative agendas that
prescribe pay transparency
Provide guaranteed jobsEnable career security through
career development
Pay for performance = merit increase
and incentive pay based on last year’s
company performance + individual
“performance rating”
Changing business models and
nature of work means challenging
the individual performance definition
and the role of base pay
“One size fits all” Segmentation and customization
37%
44%47%
54%
62%
0%
10%
20%
30%
40%
50%
60%
70%
How my totalcompensation compares
to the CEO at myorganization
How my totalcompensation comparesto the typical employee atother organizations like
mine
How my totalcompensation comparesto the typical employee in
my organization
How my bonus isdetermined
How my base pay/salaryis determined
Percentage of employees who agree they understand…
Employees claim to understand how pay is determined, but not
its value relative to other groups
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Employee perceptions of internal equity and market
competitiveness are mixed
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18%
33%
23%
43%
36%
38%
39%
31%
39%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Base Pay
Bonus
Total Rewards
Below Average Average Above Average
Market competitiveness: Most think they are paid at or above market
Overall, how do you think the value of each of the following compares to that offered for similar positions in other organizations?
Pay fairness
Half think they are paid
fairly, but 1 in 5 disagree
Paid fairly compared to
others in other companies
50% 51%Paid fairly compared to
others in my organization
Employers promise pay for performance differentiation,
but fail to deliver
Employer view Manager view
Our base salary increases are effective at driving higher
individual performance40% 48%
Our base salary increases are effective at differentiating pay
based on individual performance55% 49%
Our short-term incentive programs are effective at driving
higher individual performance50% 52%
Our short-term incentive programs are effective at
differentiating pay based on individual performance52% 52%
Our formal performance ratings are effective at driving higher
levels of performance among my direct reports n/a 50%
Our performance management system is effective at
differentiating performance among my direct reports n/a 53%
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40%Of employers think that base salary
increases drive performance
Only 50%think that short term incentives do
Perceptions of differentiation
effectiveness are mixed
Employees with alternative and flexible work arrangements are
more engaged and less likely to be retention risks
Flexible work schedule
Compressed work week
Work from home
Work from other remote
location
Hot desking/ hoteling
None of these
By Engagement Group
Highly
engaged48% 46% 43% 49% 49% 29%
Unsupported 15% 17% 19% 19% 17% 16%
Detached 19% 19% 19% 17% 19% 23%
Disengaged 18% 18% 19% 15% 16% 32%
By Retention Risk
Stayers 45% 38% 47% 47% 45% 39%
Soft Stays 29% 30% 27% 28% 29% 35%
At Risk 10% 17% 10% 10% 9% 5%
Leavers 15% 15% 16% 15% 17% 21%
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For each work arrangement, distribution of employees across the engagement or retention risk groups
3 Modernizing pay for performance starts with re(defining)
performance
In summary, the new Total Rewards reality suggests…
1 Transparency is a core principle
5 Recognize that the “total” in total rewards includes flexibility
and a move away from “one size fits all”
2 Career security is the new job security
4 Base pay needs an identity check; it’s purpose may be lost
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Conclusion
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Setting the Stage
The Modernization AgendaGetting it right
Effective Leaders are Critical to a Compelling EVP
Addressing the Work Component of the EVPEmployers need to focus on workplace stress and wellness
Achieving Effective Performance Management
Implications for Total Rewards
Future of WorkEffective management of work types, channels and options is part of the modernization agenda
Additional Information
The Reality: The employment relationship is changing
The plurality of work options is here…
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Artificial IntelligenceRobotics
Talent platforms
AlliancesOther types of
workers
OutsourcingTraditional
employees
Volunteers
Resulting in fundamental shifts in how work and organizations
are organized
Our organization is a place containing
employees doing work.
Our organization organizes work and
talent.
Our organization is a fixed set of functions
that work together to create value.
Supply chain Manufacturing
Retail stores Marketing
IT R&D
Our organization is a malleable set of
functions and deciding which ones get
done inside the organization is a big part
of strategy.
Supply chain Manufacturing
Retail stores Marketing
IT R&D
R&DRetail stores
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The use of non-employee talent is increasing and having an impact
on businesses
Growth in share
of non-employee
talent expected
over next three
years
25% 24% 46% 54%
Of all managers
say they manage
at least one
contingent worker on their team
Of all managers
say they manage
at least one
contractor
Of companies
report changing
their workforce
activities enabling
them to use more
non-employee
talent due to
technology now
or in in the next
three years
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Looking ahead, employers think they will redesign jobs that require
either lower or higher skills
Which of the following areas of your workforce
and work activities are changing today or will change in the next three years due to technology?
Today
but not
in 3 years
Today
and in 3 years
In 3 years
Neither
Paying more for employees with certain skill sets 29% 15% 35% 22%
Increasing work flexibility (e.g., scheduled hours to get
work done)30% 13% 31% 26%
Changing the way we design jobs so they can be done
by employees with lower skills14% 4% 29% 53%
Enabling work to be deployed to other locations 27% 11% 27% 36%
Changing the way we design jobs so they can only be
done by employees with more skills16% 4% 26% 54%
Requiring/Enabling us to use more nonemployee talent 18% 6% 23% 52%
Improving collaboration and information sharing 45% 22% 18% 16%
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Conclusion
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Setting the Stage
The Modernization AgendaGetting it right
Effective Leaders are Critical to a Compelling EVP
Addressing the Work Component of the EVPEmployers need to focus on workplace stress and wellness
Achieving Effective Performance Management
Implications for Total Rewards
Future of WorkEffective management of work types, channels and options is part of the modernization agenda
Additional Information
Supervision – Make room for managers to have the time needed
to provide effective people management
Transparency – Heighten transparency
Performance Management and Pay for Performance–
Re-define performance management and differentiate
Flexibility – Create flexible career paths, embrace flexible
work arrangements
Technology Enablement – Leverage digital media
to drive engagement
Leadership – Instill trust and confidence/build trust-based relationships;
role model the EVP, develop the next generation of leaders
Modernization will create a more equal value exchange
The employee-employer relationship in the new world of work
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Key Leverage Points for Employers to Improve
Conclusion
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Setting the Stage
The Modernization AgendaGetting it right
Effective Leaders are Critical to a Compelling EVP
Addressing the Work Component of the EVPEmployers need to focus on workplace stress and wellness
Achieving Effective Performance Management
Implications for Total Rewards
Future of WorkEffective management of work types, channels and options is part of the modernization agenda
Additional Information
CRAFT YOUR EMPLOYEE VALUE PROPOSITION
Exercise
1 What is the employee experience?
2 What are the expectations of the employer?
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EVP Statements
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The Employee Experience: Give.
Purpose and ValuesOpportunities and
Total RewardsPeople and Culture
What does ABC Company expect of an associate?
Summary Statements (“Headlines”)
EVP Statements
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The Employee Experience: Get.
Purpose and ValuesOpportunities and
Total RewardsPeople and Culture
Summary Statements (“Headlines”)
CRAFT YOUR BENEFIT PHILOSOPHY
Exercise
What does the employer think is fair and
equitable?
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ABC Company’s Benefit Philosophy
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▪ Providing “compelling competitive value” that aligns with our philosophies of being at
the 50% percentile which helps attract, develop, grow and engage a highly talented
workforce
▪ “Inspiring people” to be their best by encouraging active and healthy lifestyles and
choices including alignment to Well-Being strategies and initiatives
▪ “Promoting shared responsibility” that encourages employees to select the right
consumer driven benefits and to use benefit programs wisely
▪ “Keeping things simple” by designing one benefits platform for the movement of talent
across legal entities, provide meaningful choice for all generations and family needs and
provide education materials that are understood
▪ Provide flexible programs that meet government regulations that keep us in
“compliance”
▪ Creating short and long term programs aligned to our strategies to position us well given
future “excise tax” implications
Kate Hubben, CSFS
Client Advocate
216.937.4203
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Thank you